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Indonesia reduces the maximum palm oil export fee to $200, but it will rise in August

Image: Reuters Berita 24 English -  Indonesia released new laws on palm oil export taxes on Tuesday, detailing the recently announced levy r...


Image: Reuters


Berita 24 English -  Indonesia released new laws on palm oil export taxes on Tuesday, detailing the recently announced levy rate reduction in order to speed up shipments that had been slow to recover since an export ban was lifted.

However, according to finance ministry regulations, the levy rate will be hiked in August, causing anxiety among industrial groups.

Following a three-week suspension to replenish cooking oil stocks and keep runaway local prices in check, the world's largest palm oil exporter allowed shipments to restart on May 23.

After shipments were slowed to resume due to procedural hurdles, authorities established an export acceleration programme and adjusted tax rules.

The details of Tuesday's regulations were consistent with prior pronouncements, including a reduction in the maximum levy rate for crude palm oil from $375 to $200 per tonne, effective until July 31.

On shipments, Indonesian exporters pay a levy and an export tax, and the government stated last week that the maximum export tax would be raised to $288 per tonne.

Overall, the total charge and tax ceiling would be decreased from $575 per tonne to $488 per tonne.

The new tariffs apply to sales of cooking oil that are related to domestic distribution. The trade ministry recently increased the authorization for such shipments from around 1 million to 2.25 million tonnes.

This initiative has resulted in the ministry issuing export licences for 566,614 tonnes of crude palm oil and its derivatives as on Tuesday.

Separately, enterprises are now permitted to sell stockpiles accumulated during the export prohibition without being required to participate in a domestic cooking oil programme. However, for crude palm oil, they will have to pay a higher export tax of up to $488 per tonne, increasing the total charge and tax to $688 per tonne.

As of Monday, Indonesia had authorised export permits for 1.16 million tonnes of palm oil products as part of the programme, which runs until July 31.

According to Eddy Martono, secretary general of industrial group GAPKI, the export acceleration programme has assisted enterprises in emptying their storage tanks.

To prevent hurting farmers, he said the government should review the worldwide palm oil price and domestic FFB pricing before raising export duty rates on Aug. 1, "so we can avoid a circumstance where the price goes down and the charge goes up."

According to Sabarudin, an official with the Indonesian Oil Palm Farmers Union, while the tax was reduced, palm fresh fruit bunches (FFB) prices remained low and refiners were still limiting purchases due to near-full storage tanks.

The following are the levy rates:

Reference to a CPO Levies from June Levies from June Levies from June Levies from June Levies from June Levie

14th of July - 31st of August 1st of August 1st of August 1st of August 1st of August

55 55 55 750 55 55 55 750 55 55 55 750 55 55 55 55

>750-800 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75

>(800) 850-9595

>850-900 115-115-115-115-115-115-115-115-115-115-115-

>900-950 135 135 135 135 135 135 135 135 135 135 135 1

>950-1,000 155 145 150 155 145 150 155 145 150 155 145 150

175 150 165 175 150 165 175 150 165 175 150 165 175 150 165 175 150

195 155 180 195 155 180 195 155 180 195 155 180 195 155 180 195 155 180

>1,100-1,150 215 160 190 190 190 190 190 190 190 190 190 190

235 165 200 235 165 200 235 165 200 235 165 200 235 165 200 235 165

255 170 210 255 170 210 255 170 210 255 170 210 255 170 210

275 175 215 275 175 215 275 175 215 275 175 215 275 175 215

295 180 220 1300-1350 1300-1350 1300-1350 1300-1350 1300-1350 1300-1350

>1,350-1,400 315 185 225 225 225 225 225 225 225 225 225 225

>1,400-1,450 335 190 230 190 230 190 230 190 230 190 230 190

355 195 235 355 195 235 355 195 235 355 195 235 355 195 235 3

>1,500 375 200 240 375 200 240 375 200 240 375 200 240

(1 US dollar = 14,695.0000 rupiah)


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