Highlight Indonesia may lower CPO tax limit

by **Cals** Fri 20 Mar 2015, 02:27

Highlight
Indonesia may lower CPO tax limit

By Reuters / The Edge Financial Daily | March 19, 2015 : 9:53 AM MYT

JAKARTA: Indonesia is considering lowering the threshold it applies to its monthly export tax for crude palm oil (CPO), a major industry group in the world’s top producer said last Friday, in an effort to aid some processing industries hurt by low prices.

When international and local crude palm oil prices average below US$750 (RM276.75) a tonne, Indonesia currently cuts the CPO export tax it sets each month to zero.

Government ministries are now in talks about cutting the threshold to between US$500 and US$600 a tonne, Derom Bangun, chairman at the [size=14]Indonesian Palm Oil Board (IPOB) said after a meeting with other palm groups to discuss the issue.

“They would like to lower the threshold so the tax can be applied even if the price is lower than US$600,” said Derom, adding that he had spoken to government officials about the matter and that no timeline had yet been given.

“The ministry of industry especially would like to have this change so the downstream industry, which is now in a difficult situation, can get back to full operations,” said Derom, whose group is an umbrella organisation of major Indonesian palm oil associations and gives policy recommendations to the government.

Southeast Asia’s biggest economy set its CPO export tax for March at zero, unchanged since October last year. Malaysian palm oil futures have fallen 20% over the last year. — Reuters

This article first appeared in The Edge Financial Daily, on March 19, 2015.
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