Again! Indonesia Extends Exemption of CPO Export Fees

Indonesia government extends the exemption from Crude Palm Oil (CPO) Export Levy Fees again. This decision was the result of a meeting of the Steering Committee of the Palm Oil Plantation Fund Management Agency on 31st October 2022. Coordinating Minister for the Economy Airlangga Hartarto said that the extension would take effect on 1st November 2022.

“We maintain this incentive, the tariff of US$ 0/MT is extended until the reference price is greater than or equal to US$ 800/MT,” said Airlangga in a written statement (02/11/2022).

Reported by Tempo.co, Airlangga explained that this policy was implemented because the Biodiesel Market Index (BMI) Price was lower than the Solar Market Index (SMI) Price, so there was no biodiesel incentive payment. Therefore, the export levy tariff of US$0/MT was extended until the CPO reference price was greater than US$ 800/MT.

“Because now the price is still around US$ 713/MT, so the export levy tariff of US$0/MT is valid until December. But once the price rises to US$ 800/MT, the export levy tariff of US$ 0/MT will not apply,” he added.

Previously, the government implemented a progressive tariff scheme for export levies on palm oil products and their derivatives. The scheme follows the reference price of global crude palm oil or CPO. In addition, the meeting also decided to accelerate the realization of the People’s Palm Oil Rejuvenation (PPOR) program with several things that needed to be followed up. One of them is further discussion through the technical team between the relevant ministries and agencies.

“As well as encouraging the planting of intercrops on the PPOR area which includes corn, soybeans and sorghum as part of the food security program,” said Airlangga.

According to him, the PPOR program needs to be improved so that the difference in the price of Fresh Fruit Bunches for plantation partners and non-partners is getting smaller. This will impact the next Komrah Coordination Meeting which was held in mid-November, so that the PPOR plan was obtained within the framework of planting intercrops in December 2022.

According to Tempo.co, Indonesia is an influential country in the palm oil export market. In 2018, Indonesia managed to export 29.3 million tons of palm oil. These export destinations include India, China, Malaysia, and Pakistan. The large number of exports and the wide range of destinations make Indonesia the largest producer of palm oil in the world.