Indonesia Gov’t Considers Reducing Its Levy on Palm Oil Exports
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The government is considering reducing its levy on palm oil exports, Coordinating Economic Affairs Minister Darmin Nasution said on Thursday, as the country pushes to maintain its position in international markets for the commodity.
Speaking at an industry conference in Bali, the minister said an “adjustment” to the levy was among steps to be taken by the government, although he later said that this was still being discussed.
“We don’t have final position yet,” Darmin said on the sidelines of the event. “We have to calculate that carefully. We don’t want lowering it only to result in lower prices.”
Indonesia, the world’s top producer of the commodity, currently imposes a levy of up to $50 per metric ton on various palm oil products.
The Indonesian Palm Oil Association (Gapki) said last week that it had proposed cutting the palm oil export levy by $20 per ton until prices of the vegetable oil reach $700 per ton.
The government’s reference price for crude palm oil has stayed below $750 per ton for over a year.
Darmin said the government would discuss the levy adjustment intensively over the next two months, hoping to reach a decision around year-end.
Questions & Answers
Q.What is the current maximum levy Indonesia imposes on palm oil exports?
What is the current maximum levy Indonesia imposes on palm oil exports?
Indonesia currently imposes a levy of up to $50 per metric ton on various palm oil products. This charge is under consideration for adjustment by the government, according to the Coordinating Economic Affairs Minister.
Q.What reason did the minister give for the government considering a reduction in the palm oil export levy?
What reason did the minister give for the government considering a reduction in the palm oil export levy?
The government is considering reducing the levy to maintain Indonesia's position in international markets for palm oil. The minister emphasised careful calculation to avoid simply lowering prices without benefit.
Q.When does the government expect to make a decision on adjusting the palm oil export levy?
When does the government expect to make a decision on adjusting the palm oil export levy?
The Coordinating Economic Affairs Minister stated that the government plans to discuss the levy adjustment intensively over the next two months. A decision is hoped to be reached around the end of the year.
Q.What specific proposal has the Indonesian Palm Oil Association made regarding the export levy?
What specific proposal has the Indonesian Palm Oil Association made regarding the export levy?
The Indonesian Palm Oil Association proposed cutting the palm oil export levy by $20 per ton. This reduction would apply until prices for the vegetable oil reach $700 per ton, according to their suggestion.
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