CPO Export Duty Projected to be 0 Percent in October

TEMPO.CO, Jakarta – The CPO export duty for next month’s export was projected to be 0 percent as the commodity's price continued to fall and was predicted to be under US$750 per metric ton.

“October’s [CPO] export duty is likely to be at 0 percent due to low prices,” Deputy Trade Ministry Bayu Krisnamurthi said on Tuesday, September 23, 2014.

Currently, the CPO progressive export duty is set based on the Finance Minister’s regulation number 223/PMK.011/2008 at a minimum of 7.5 percent for US$750-US$800 per ton. If the price is lower than US$750, the export duty will be automatically removed.

However, Bayu said, Chinese business owners have asked the Indonesian government to scrub the CPO export duty permanently to make CPO prices more competitive against other vegetable oil prices.

“The government will consider the request of [CPO] export duty removal. However, the benefit for Indonesians should be allowed for,” Bayu said.

Fadhil Hasan, the director executive of the Indonesian Palm Oil Producers Association (GAPKI), said the global CPO prices had been declining due to abundant supplies of soybean.

“Based on the three-month trend, it is very likely that the CPO prices would be under US$750 per metric ton,” Fadhil said.

Fadhil revealed the export volume of CPO and its derivatives reached 21.2 million tons in 2013, increasing by 16 percent from 2012. Of the total figure, Indonesia shipped 4.2 million tons to India, 4 million tons to Europe and 2.6 million tons to China.

PINGIT ARIA