Indonesia’s 10% levy could cause CPO exports to plummet

Published 2024년 12월 26일

Tridge summary

The Indonesian Palm Oil Association (Gapki) has expressed concerns that a proposed increase in the levy on crude palm oil (CPO) exports from 7.5% to 10% could make local producers less competitive internationally. The move is aimed at supporting the government's mandatory 40% palm oil-based biodiesel programme, which starts in January and is expected to reduce the country's reliance on imported diesel and boost demand for domestically produced vegetable oils. However, businesses worry that the higher levy could decrease the overall volume of CPO exports, especially with stagnant domestic production.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The Indonesian Palm Oil Association (Gapki) has warned that a plan to increase the levy on crude palm oil (CPO) exports to 10% next year could render local producers less competitive in the international market. The government currently imposes a 7.5% levy on CPO exports, while a lower rate of between 3 and 6% of the reference price applies to refined palm oil products. “Increasing the export levy will make Indonesian palm oil (exports) less competitive compared to neighbouring countries,” Gapki chairman Eddy Martono said on Sunday, as quoted by Bloomberg Technoz. Coordinating Economic Minister Airlangga Hartarto said on Dec 19 that increasing the CPO export levy would help the government push forward with its mandatory 40% palm oil-based biodiesel (B40) programme, which starts in January. He added that the levy would be implemented once the Finance Ministry had issued the relevant regulation, Reuters reported. The biodiesel programme aims to reduce the country’s reliance on ...

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