Indonesia eases export rules further to ‘eliminate’ palm oil stocks

JAKARTA: Indonesia is further relaxing rules to allow more companies to export palm oil, an official said on Friday, in a bid to reduce bottlenecks and bloated stocks caused by a export ban and regulatory changes implemented to maintain domestic supply.

The world’s top palm oil exporter has allowed palm oil shipments to resume from May 23 after a three-week ban aimed at boosting cooking oil stocks and controlling runaway prices in a context of growing domestic discontent.

But exports have been slow to pick up again, with confusion over procedural issues and new requirements for companies to join a government bulk cooking oil distribution scheme, where part of their product is destined for the market. domestically before export permits can be granted.

However, companies that have not joined the program will still be allowed to ship palm oil, provided they pay a fee of $200 per ton in addition to the export tax and levy, Minister Luhut Pandjaitan said on Friday.

Luhut said the latest concession was to “flush out” and reduce high palm oil stocks that have prevented refiners from buying more palm fruit from farmers, under his new “acceleration program “.

Indonesia aims to export at least 1 million tons of palm oil products by July 31 under this program.

The easing is “a good step forward,” an industry source said, adding that the additional $200 fee was expensive and it remains to be seen how it would change exports.

Companies eligible for the program could take the opportunity to reduce their inventories, said Eddy Martono, secretary general of the Indonesian Palm Oil Association (GAPKI).

“Maybe their profits would be lower, but it’s better than keeping full storage,” he said.

Luhut also said the government would also allow companies to export five times the amount of palm oil they sold domestically during a “transition period”. This compares to a previous three times ratio.

The new export rate and acceleration program could help Indonesia export nearly 2.5 million tonnes of palm oil in July, Eddy said, “if all goes well”.

Before the export ban, the country typically exported between 2.5 million and 3 million tonnes of palm oil per month.

The Ministry of Finance has raised the maximum export tax on crude palm oil (CPO) to $288 a ton when government benchmark prices are above $1,500 a ton, according to a regulatory document reviewed by Reuters on Friday.

Previously, the maximum export tax was $200 per tonne when the CPO price was above $1,250.

Commerce Minister Muhammad Lutfi said on Tuesday that while the maximum export tax would be increased, the export tax would be reduced so that the combined cap for the two would be reduced to $488 per ton from $575. per ton to encourage shipments.

The reduction in the export levy has not yet been announced.

Below are the changes to the export tax rates for CPO ($ per ton):

Reference CPO Tax Pvs New Tax Rates


Up to 1,000 unchanged since

pv structure

>1000-1050 93 124

>1050-1100 116 148

>1100-1150 144 178

>1,150-1,200 166,201

>1,200-1,250 183,220

>1250-1300 200 240

>1300-1350 250

>1,350-1,400 260

>1400-1450 270

>1,450-1,500 280


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Felix J. Dixon