JAKARTA (TheInsiderStories) – Indonesia set the reference price of crude palm oil (CPO) for export duty at US$568.94 per metric ton (MT) of CPO in June, said trade ministry on Monday (05/29). The reference price decreased 10.42 percent compared to May of $535.15 per MT of CPO.
“At the moment the CPO reference price is below the level of $750/MT. For that, the government wearing zero export duty for the period of June 2020,” said the director general at the trade ministry, Affairs Indrasari Wisnu Wardhana in a statement.
While, the reference price of cocoa beans in June 2020 was $2,392.59 a MT, up 4.79 percent from the previous month which was $2,283.14 per MT. This has an impact on the increase in of cocoa beans retail sales in June to $2,108/MT, up 5.35 percent from the previous period was $2,001 a MT.
The increase in reference and retail price of cocoa beans is due to the strengthening international prices. This increase had no effect on the 5 percent cocoa bean export duty. In addition, export duty and retail price for wood and leather products there was no change from previous month.
Since January 2020, Indonesian government has imposed export levies for CPO and derivatives products as the implementation of the mandatory 30 percent biodiesel (B30) use. As known, the country aimed to implement the B30 starting next year to reduce the current account deficit (CAD).
Its estimated when the policy take effect, the CPO use during the application of B30 will rise to around 3 MT. Accordance to Minister of Finance Regulation Number 23 of 2019, if the CPO price is above $570 per ton, a CPO and derivatives will be levied 50 percent. But, if the Prices above $620 a ton are subject to 100 percent full of levies.
Since last year, the country has implement zero export levy for palm oil products. The policy has been taken to protect the domestic palm oil industry from falling prices due to flagging exports and oversupply,
The higher levy set at $50 a ton if the price above $690 per ton. Then, if the price is in the range of $570 to $619 per ton, the export levy becomes $10 to $25 a ton. And, if the international price has returned to normal above $619, the export levies will again be set at $50 per ton.
The government expects that by lowering the levies, Indonesian exporters can set more competitive prices for palm oil shipments, and that in turn will help local palm farmers. Indonesia also imposes export taxes on crude palm oil when the reference price is above $750 per ton. The rules on the export taxes remain unchanged.
Aside from regulating CPO export levies, this regulation imposed by the finance ministry also stipulates the amount of the first and second derivative export levies of these commodities.
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