Minister seeks RI palm oil investment stoppage

Minister seeks RI palm oil investment stoppage

SINGAPORE (Reuters): Indonesian Environment Minister Sarwono
Kusumaatmadja said on Tuesday he would propose a moratorium on
new investments in the country's palm oil sector.

Indonesian authorities blamed plantation companies which
indiscriminately cleared land for planting for the brush and
forest fires that spewed a choking smog across much of Southeast
Asia for weeks earlier this year.

"There was this stress on quantity that drove the investors to
clear land out of proportion to what we really need," he told
reporters after a meeting of the Association of Southeast Asian
Nations (ASEAN) meeting on the smog problem.

"And that's the one that triggered the haze problem," he said.
"The drive was really not needed. If we concentrate on quality,
then the whole problem will be more manageable."

"Currently there is no freeze on investments in the palm oil
sector, but I am going to recommend a moratorium on new
investments," Sarwono said.

Indonesia is the world's largest producer of crude palm oil
after neighboring Malaysia.

Both are members of ASEAN along with Brunei, Myanmar, Laos,
the Philippines, Singapore, Thailand and Vietnam.

Trade

Meawnhile, Indonesian palm olein prices were generally stable
in late trading on Tuesday, with producers set to meet government
officials over the imposition of additional export taxes on palm
oil, Indonesian traders in Singapore said.

Palm olein was quoted at Rp 2,275-2,300/kg in Jakarta.

"Some players raised offers to Rp 2,300 because of the
rupiah's weakening against the U.S. dollar," one trader said.

Traders also said representatives from 17 groups of companies
allowed to export palm oil were scheduled to meet officials from
the Industry and Trade Ministry on Wednesday.

"We received a notification from the ministry asking us to
attend the meeting," one trader said. "The meeting is about the
additional export tax, but there were no further details."

Industry and Trade Minister Tunky Ariwibowo said last week an
additional export tax of between 28 and 30 percent would be
imposed on producers who fail to supply 80 percent of their
production to the local market.

Crude palm oil is now subject to an export tax of five
percent, palm olein two percent, and crude olein and RBD palm oil
four percent each.

"I don't expect any major changes to the tax structure as
announced by the minister," one trader said. "But there have been
plenty of rumours in the market over the meeting."

The additional export tax, which became effective on Dec. 19,
is aimed at boosting domestic supply and keeping prices under
control at least until the March presidential polls.