India slashed the basic import tax on crude palm oil (CPO) from 27.5 percent to 15 percent but rises the levy to 17.5 percent to support the domestic industry, said finance minister, Nirmala Sitharaman, on Monday (02/02) - Photo: Special

JAKARTA (TheInsiderStories) – India slashed the basic import tax on crude palm oil (CPO) from 27.5 percent to 15 percent but rises the levy to 17.5 percent to support the domestic industry, said finance minister, Nirmala Sitharaman, on Monday (02/02). The country also imposed 20 percent tax on crude soybean and soy oil imports but cut basic customs duty on both the commodities from 35 percent to 15 percent.

India is the major export destination for Indonesia and Malaysia palm oil products. According to the Indonesian Palm Oil Association (GAPKI) data, exports to India fell by 36.4 percent, China dropped by 1.7 percent, and Middle East decreased by 36.13 in August compared to July and 11 percent in annual basis.

The organization reported Indonesian palm oil products and derivatives in August fell by 14.3 percent to 2.68 million tons (MT) compared to previous month caused of the low demands. In July, total export of the largest producer was 3.13 MT.

The executive director of the organization, Mukti Sardjono, said export volume declined was influenced by COVID-19 outbreak and the rising of CPO prices. He also reported, the export values of palm oil dropped to US$1.69 billion than July with total amount of $1.86 billion.

He continued, the average price in August stood at $703 per MT of CPO (from previous month at $659 a MT of CPO. Based on export destination, he added,

Based on type, CPO exports down by around 146,000 tones, processed CPO exports fell by 242,000 tones, lauric dropped by 58,000 tones, and oleochemical exports still experienced an increase of around 5,000 tones. In August, Sardjono said, the domestic consumption around 1.38 million tons or fell by 3.3 percent from 1.43 million tons in July.

He elaborated, the consumption of palm oil for food increased by 1.9 percent to 654,000 tones, oleochemicals up by 2 percent to 151,000 tones. In contrast, biodiesel consumption fell by 9.8 percent to 576,000 tones. In the same month, the production reached 4.8 million tones or 13.74 percent higher than the previous month and jumped by 2.1 percent than August 2019.

“The increase in production occurs not only because it follows the cycle of the season but also because the plants have shown a recovery after the first semester of 2020 fertilization returns to normal,” he said in an official statement.

Sardjono also reported, Indonesia’ palm oil product exports have reached 21.31 million tones during January to August. Its 11 percent lower than 2019 with the main contributor CPO processed products, which experienced a 16.1 percent decline.

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