Govt to maintain ban on CPO exports: Tunky

Govt to maintain ban on CPO exports: Tunky

JAKARTA (JP): The government stressed again yesterday that it
would maintain its export ban on crude palm oil (CPO) and all its
derivatives except stearin and palm kernel oil to secure the
supply of cooking oil to the domestic market.

Outgoing Minister of Industry and Trade Tunky Ariwibowo said
the export ban would only be lifted if the local supply of
cooking oil returned to normal.

The ban affects exports of CPO, refined bleached deodorized
palm oil, crude olein and refined bleached deodorized olein.

Last month, the government lifted its ban on the export of
stearin and palm kernel oil.

"If the price stabilizes and there is a guarantee that the
supply for domestic needs is sufficient, we would consider
allowing exports again," he said following a meeting with
President Soeharto.

Tunky also revoked his previous decree -- issued on Dec. 17 --
which established a 20 percent quota on the export of palm oil
and olein and imposed a 28 percent to 30 percent surcharge tax on
exports which exceeded the quota.

Last December the government banned the export of CPO, olein
and other CPO derivatives until March to ensure an adequate
domestic supply of cooking oil and to stabilize the price.

The measure failed to stop cooking oil prices soaring and food
stores have run short.

CPO producers are reportedly withholding their products to
gain from sales overseas when exports are allowed again, while
many retailers are stockpiling cooking oil for when prices go up
after the export ban is lifted.

The price of spot CPO in Europe has risen from US$557.50 per
ton before the ban -- which became effective on Jan. 1 -- to $680
per ton at present while olein has gone from $572.50 to $652.50
per ton.

According to the Ministry of Industry and Trade, cooking oil
supply from January to April is expected to reach 923,023 tons,
comprising 863,023 tons from CPO production and 60,000 tons from
coconut oil.

The domestic consumption of cooking oil for the same period is
estimated to be 611,746 tons.

Indonesia is the world's second largest producer of CPO after
Malaysia with total supply this year projected to reach 5.9
million tons. Local annual demand is usually about 3.5 million
tons.

Outgoing Minister of Agriculture Sjarifudin Baharsjah said
yesterday that the state-owned plantation firm PT Perkebunan
Nusantara would supply 58,000 tons of olein to the domestic
market in April.

Sjarifudin said after meeting President Soeharto that PTPN's
CPO production in April was estimated at about 133,000 tons which
is equivalent to more than 63,000 tons of olein.

He said that PTPN's olein would be released to the domestic
market if the price of cooking oil continued to increase.

Last month, the minister said that PTPN would sell about
100,000 tons of CPO per month, virtually 100 percent of its
production.

PTPN at present produces about 1.8 million tons of CPO a year
which is enough to make about 1.5 million tons of olein. Olein
accounts for 70 percent of all CPO products. (gis/prb)