No plans to lower CPO export taxes soon: Rahardi
No plans to lower CPO export taxes soon: Rahardi
JAKARTA (JP): The government has no immediate plan to reduce
export taxes on crude palm oil (CPO) and its derivatives despite
a drop in cooking oil prices on the domestic market in recent
weeks.
Minister of Trade and Industry Rahardi Ramelan acknowledged on
Friday that prices were lower, but he said it was not sufficient
to affect the application of taxes.
Current export taxes of palm oil commodities -- imposed in
June to discourage exports and ranging up to 60 percent -- will
continue, he added, until prices of cooking oil reached the ideal
level of below Rp 5,000 per kilogram.
"Let the market prices of cooking oil drop first, then we'll
calculate together how much the export taxes can be reduced," he
told reporters at the ministry's office.
"For now, I will not lower the taxes until further
developments."
Minister of Forestry and Plantation Muslimin Nasution told an
international seminar on CPO in Bali on Wednesday the government
would lower the export tax to 52 percent from 60 percent by
year's end, noting that domestic supplies of cooking oil, mostly
made of CPO, would have increased by then.
Rahardi argued the supply was still relatively low, although
it had increased slightly since the government lifted subsidies
on the product earlier this month.
"The volume is not enough yet, what is out in the market is
the stock that had been hoarded," he said, reiterating the
government's suspicion that its attempts to contain cooking oil
prices were undermined by hoarders.
He said the government would have to wait until cooking oil
supplies flooded the domestic market before it could decide to
lower the taxes.
Earlier this year, the government imposed an export ban on all
palm-oil commodities for three and a half months in a bid to
guarantee domestic supply of the cooking oil and contain its
price, which has been on a sharp rise since the end of last year.
Neither the export ban nor the high taxes have proved
effective in stabilizing the price.
Suspicions arose that the commodities were smuggled out of the
country or hoarded by producers and distributors because
international prices of the commodities were much higher than the
domestic ones.
The Ministry of Trade and Industry's Market Information Center
says unpackaged cooking oil is currently being sold at Rp 6,500
(59 U.S. cents) per liter at traditional markets, down from above
Rp 7,500 last month. (das)