Major challenge faced by Indonesian palm kernel expeller suppliers in competing with their Malaysian counterparts
Palm Kernel Expeller
Indonesia
Malaysia
Regulation & Compliances
Innovation & Technology
Arif Sukmawan
Published Nov 11, 2020
One of the major challenges faced by the palm kernel expeller (PKE) in Indonesia to compete with the PKE suppliers from Malaysia is the export fee that is applied by the government of Indonesia on this commodity. At the moment, PKE suppliers must also take into account the 3% export tax when quoting their price offering to the prospective buyers, which puts their price on a less competitive rate in comparison to what Malaysian PKE suppliers can offer.
This current situation is also the main factor on the initiative by the Indonesian palm oil association to lobby for lower tax rate (decrease to 1.5% in 2021), so that the suppliers can have a better edge when competing on a global level. Indonesia and Malaysia have been the two countries where the global buyers source their product from, with Indonesian PKE preferred for its reliable production quantity and Malaysian PKE desired for its quality and competitive price.
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