Palm Oil Export Levies Suspended until 1 January 2020
The government of Indonesia has decided not to collect palm oil levies until 1 January 2020 as the government begins implementation of mandatory B30 program. Economic Coordinating Minister Darmin Nasution, said on Tuesday, (24/29/2019), that the Steering Committee of the Indonesia Oil Palm Plantation Fund Management Agency (BPDPKS) had held a meeting and made decision to suspend levies collection even it was still applicable. “CPO export levies are suspended, even the reference price is above the threshold of US$57, we are not collecting it until 1 January 2020,” Darmin said. Based on the Finance Ministry Regulation No 23/PML.05/2019, BPDPKS will not collect levies on palm oil, CPO, and its derivatives export when CPO prices are below a threshold of US$570 per ton, but will charge between US$5, US$10, US$15, US$20, US$25 once CPO prices are in a range of US$570-US$619 per ton.
JAKARTA--The government of Indonesia has decided not to collect palm oil levies until 1 January 2020 as the government begins implementation of mandatory B30 program.
Economic Coordinating Minister Darmin Nasution, said on Tuesday, (24/29/2019), that the Steering Committee of the Indonesia Oil Palm Plantation Fund Management Agency (BPDPKS) had held a meeting and made decision to suspend levies collection even it was still applicable. “CPO export levies are suspended, even the reference price is above the threshold of US$57, we are not collecting it until 1 January 2020,” Darmin said.
Based on the Finance Ministry Regulation No 23/PML.05/2019, BPDPKS will not collect levies on palm oil, CPO, and its derivatives export when CPO prices are below a threshold of US$570 per ton, but will charge between US$5, US$10, US$15, US$20, US$25 once CPO prices are in a range of US$570-US$619 per ton.
The levy will rise to US$20, US$30, US$40, US$50 when prices hit above US$619 per ton. At the meeting of BPDPKS’ steering committee, Trade Ministry reported that as of 20 September 2019 CPO price is at US$574,9 per ton, above the threshold US$570. It means the government should start imposing levies next October.
Darmin added that if the levies were imposed immediately, the price of Fresh Fruit Bunches (FFB) farmers receive would be curbed. The suspension had been approved by President Joko Widodo.
“For that reason and based on a direction from the president, as well as on study, we decided to suspend levies imposed on CPO and its derivative products until 1 January 2020 as we begin implementation of mandatory B30 program,” Darmin said.
Darmin hoped implementation of the B30 biodiesel policy, which was supposed to significantly raise the demand for palm oil, would be able to push up palm oil prices in the domestic market.
“When the mandatory program is kicked off, we will announce it earlier, not on 31 December 2019, but weeks before. The program will be launched 1 January 2020. At the time, use of CPO will increase by an estimated 3 million tons, or even more than use of B20. The price will rise when use of biodiesel increase.” ***
