Indonesia, the world's biggest palm oil producer, will cut its export tax on
crude palm oil to 15% in August from the current 20%, an official at the
Indonesia Trade Ministry said Thursday.
Indonesia sets a progressive export tax system on palm oil using the average
spot CPO prices in Rotterdam, as part of the government's plan to ensure
sufficient supplies for domestic consumption.
Palm oil producers and exporters have called for a review of the existing palm
oil export tax system, which allows the government to impose tax rates from 1.5%
to as much as 25%, as the levy "distorts the vegoils flow to the market," said
an importer in Mumbai.
However, a recommendation by industry executives to adopt a fixed tax rate on
the commodity is "still far away from being approved," the Jakarta-based
government official, who preferred to remain anonymous, said.
Indonesia exported 15.7 million tons of palm oil last year, an increase of
0.8% from the previous year, according to data from the Indonesian Palm Oil
Producers Association.
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.
com
-Andreas Ismar in Jakarta contributed to this story