Tax imposed on CPO exports to protect local producers

Tax imposed on CPO exports to protect local producers

JAKARTA (JP): The government, beginning today, will introduce
an export tax on crude palm oil (CPO) products to protect local
producers and to stabilize domestic cooking oil prices.

Agus Haryanto, a spokesman for the Ministry of Finance, said
yesterday that the measure was introduced by the Ministry of
Finance based on recommendations from the Ministries of Trade,
Agriculture and Industry as well as Bulog, the government-run
semi-buffer stock agency.

The tax will be imposed when the price of cooking oil on the
local market reaches above Rp 1,250 (57 U.S. cents) per kilogram,
he said, adding that the rates will vary according to the volume
of the CPO exports and their FOB (free on board) prices.

Ibrahim Hasan, the chairman of Bulog, said earlier that
restricting CPO exports is essential in anticipating the possible
shortage of CPO supply in the country.

Bulog, which controls the supply and prices of scores of
foodstuffs, including rice, sugar and cooking oil, recently
imported around 50,000 tons of olein, a CPO product for cooking
oil production, to curb an increase in cooking oil prices at
home.

The chairman of the association of cooking oil producers said
recently that introducing the progressive tax on CPO exports may
discourage new investment for CPO production.

The government is currently engaged in an intensive campaign
to encourage investors to open palm oil plantations in a bid to
increase annual CPO production to around seven million tons by
2000 from around four tons at present.

The prices of CPO products in Indonesia, the lowest in Asia,
have discouraged producers from selling their products at home.
The price of cooking oil, for example, is US$663 per ton, lower
than $680 in Malaysia, the world's biggest producer of palm oil,
and $720 in Europe.(hen)