Indonesia issues new palm oil levies rule to boost competitiveness
Indonesia, the world’s largest palm oil exporter, will implement new monthly levies on palm oil exports, effective Saturday. Crude palm oil will be taxed at 7.5% of the government-set reference price, while refined products will face lower rates of 3% to 6%. This move aims to enhance competitiveness against rival oils and support local farmers, including funding for biodiesel and replanting subsidies.
JAKARTA, Sept 19 (Reuters) – The world’s biggest palm oil exporter Indonesia will introduce a new set of monthly levies in a bid to improve competitiveness against rival edible oils, a regulation published on Thursday by its finance ministry showed.
Under the new rules, which take effect on Saturday, levies for crude palm oil exports will be set at a 7.5% rate of the reference price set periodically by the government.
The more refined palm oil products will be charged lower levy rates, at between 3% and 6% of the reference rates, the document showed.
Indonesia currently imposes a levy of between $55 and $240 per metric ton for crude palm oil exports, depending on a set of price brackets for the monthly reference price.
“Certainly this will make Indonesian origin more competitive especially in October. Malaysian origin need to get lower in order to compete,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Malaysia is the world’s second largest palm oil exporter.
Indonesia made changes to “improve palm oil competitiveness and provide added value to farmers’ fresh fruit bunches”, the finance ministry decree said.
A government official has previously said that the changes were necessary to compete with rivals such as soyoil and sunflower oils, against which palm is losing its competitive edge.
The levies are collected to help finance palm oil programmes such as a replanting subsidy for smallholders and for the country’s biodiesel programme.
Source Link : https://www.reuters.com/business/energy/indonesia-issues-new-palm-oil-levies-rule-effective-this-weekend-2024-09-19/
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