Govt vows to lift CPO ban on time
JAKARTA (JP): The International Monetary Fund (IMF) said yesterday it had been assured by the government that the export ban on crude palm oil (CPO) and its derivatives would be removed April 22 as agreed to in the latest reform package announced last week.
"I spoke with him (Minister of Trade and Industry Mohamad "Bob" Hasan) on the telephone yesterday, and I got confirmation that the ban would be lifted as scheduled," the chief IMF representative here, Kadhim Al-Eyd, told The Jakarta Post yesterday.
Al-Eyd was asked to comment on the reported controversial statement by Hasan on Monday that he would maintain the export ban indefinitely until domestic cooking oil prices stabilized.
"I also got the same confirmation from Mr. Ginandjar (the coordinating minister for economy, finance and industry)," Al-Eyd added.
He expressed his belief that the government would implement the reform programs as scheduled.
Hasan's remarks, printed by several newspapers Tuesday, created confusion and frustration among palm oil producers who have been shut out of the international market since January.
Ginandjar Kartasasmita, apparently concerned about the impact of Hasan's reported statement on the market, immediately confirmed Tuesday that the government would lift the palm oil export ban on April 22 as scheduled.
"It is not true," Ginandjar told Reuters when he was asked about Hasan's statement which implied backtracking on the part of the government over the implementation of the IMF-brokered reform package.
The supplementary reform package agreed to last week was the third pact between the government and the IMF after the government was seen to be backsliding on the November 1997 and Jan. 15, 1998 packages.
The association of palm oil and edible oil producers told the Post Tuesday that they were dismayed over what they saw as conflicting and confusing signals from Hasan only a few days after they had assured him that they would cap the palm oil sales price at Rp 2,750 per kilogram, compared to the equivalent of Rp 4,885 in the international market.
An official at the finance ministry said yesterday that his office was calculating export taxes for crude palm oil and its various derivatives.
He said that although the reform package allowed for a maximum 40 percent in export taxes, the tax rates would not be the same for all palm oil products.
"We expect to issue the ruling on the export taxes next week so that exporters can immediately start negotiations with foreign buyers," added the official who asked for anonymity.
Major crude palm oil producers in North and West Sumatra told the Post that as long as the government could curb export smuggling, there should not be any fear of domestic shortages after it opens the lid on exports. They said national production this year was estimated at six million tons, while domestic demand was projected at only 3.5 million tons.
"An export tax of up to 40 percent on olein (the main basic material for cooking oil) will sharply reduce the margin that can be gained from exports, especially if the rupiah strengthens steadily against the dollar," a Medan-based producer said.
But most important, he added, the government would allow exports only in bulk and not in drums to make inspection easier and to minimize loopholes for export smuggling. (rei/vin)