Indonesia Will Not Cut Export Levy on Palm Oil: Minister
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Indonesia has decided not to make any changes to export levies on palm oil, Coordinating Economic Affairs Minister Darmin Nasution said on Thursday. “Even though we have had discussions on the issue, we prefer not to change the policy on this area. There is no change,” Darmin said at a press briefing in Kuala Lumpur.
“In the long term, I cannot confirm, but in the short term there is no change,” he said.
Darmin said at an industry conference in Bali last week that Indonesia was considering a move to reduce the levy.
Indonesia, the world’s top producer and exporter of the edible oil, currently slaps a levy of $50 per metric ton on crude palm oil, and a range of $20-$40 for refined palm products.
The Indonesian Palm Oil Association (Gapki) said last month 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.
Speaking in Kuala Lumpur, Darmin said Indonesia decided against the cut in export levy as such a move would result in lower prices that would benefit consuming countries, not exporters.
The minister has in the past said Indonesia was considering reducing the levy to boost exports, which would then reduce stockpiles, but he said on Thursday that this would be achieved by boosting the use of biodiesel.
“Our policy is to increase the utilization of biodiesel, so of course, it takes time but I believe the result will be there in six months,” Darmin said.
Questions & Answers
Q.What is the current export levy for crude palm oil from Indonesia?
What is the current export levy for crude palm oil from Indonesia?
Indonesia currently imposes a levy of $50 per metric ton on crude palm oil exports. Refined palm products face levies ranging from $20 to $40 per ton.
Q.Why did Indonesia decide against cutting the palm oil export levy?
Why did Indonesia decide against cutting the palm oil export levy?
The decision was made because a levy cut would lead to lower prices, benefiting consuming nations rather than the exporters. This was stated by Minister Darmin Nasution in Kuala Lumpur.
Q.What alternative strategy will Indonesia use to reduce palm oil stockpiles and boost exports?
What alternative strategy will Indonesia use to reduce palm oil stockpiles and boost exports?
Indonesia plans to increase the use of biodiesel to address stockpiles and boost exports. The minister expects this policy to show results within six months.
Q.When did Darmin Nasution previously suggest that a reduction in the palm oil levy was being considered?
When did Darmin Nasution previously suggest that a reduction in the palm oil levy was being considered?
Last week, at an industry conference in Bali, Minister Darmin Nasution indicated that Indonesia was considering a move to reduce the export levy on palm oil.
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