TEMPO.CO, Jakarta – Deputy Trade Minister Bayu Krisnamurthi said that crude palm oil (CPO) exports in October 2014 will not be subjected to export duties. However, producers are asked to hold back from exporting in large quantities, so that prices will not fall.
"Even though taxes are at zero percent, I urge exporters not to export excessively," he said in Jakarta last weekend.
In the Minister of Finance Regulation No.223/PMK.011/2008, the lowest CPO export tax is set at 7.5 percent for a reference price of US$750 to US$800 per metric ton. For prices under US$750 per metric ton, the export duty is exempted.
However, CPO prices have been on a downtrend. According to the Trade Ministry, in the last month CPO prices have fallen from USto US$660 per metric ton.
Bayu said prices are down because there is an excessive global supply of vegetable oil. If CPO exporters try to benefit from the tax exemption by boosting exports, prices will plummet. "It's counterproductive."
Meanwhile, executive director of the Indonesian Palm Oil Association, Fadhil Hasan, said CPO price has been on a negative trend. That's why, he said that producers will not export excessively duty during the tax exemption period. "We cannoty sell when the demand is low anyway," he said.
PINGIT ARIA | YOLANDA RYAN ARMIDYA