TEMPO.CO, Jakarta - The Indonesian government is considering a review of the export levy on Crude Palm Oil (CPO), currently set at 7.5%. Dida Gardera, Deputy of Food and Agribusiness Coordination at the Coordinating Ministry for Economic Affairs, said that a review is necessary to ensure two key factors: increasing farmer welfare through higher Fresh Fruit Bunch (FFB) prices and maintaining competitive CPO prices at the global level. 

“The export levy should indeed be regularly evaluated,” said Dida when met at the discussion on palm oil at Hotel Bidakara, South Jakarta, Monday, November 18, 2024.

Dida emphasized that the relatively stable domestic production and export of CPO, coupled with rising palm oil prices, indicate sufficient price competitiveness.

“As long as these conditions persist, we will conduct regular evaluations, typically every three to six months,” Dida added.

He did not deny that a review may lead to changes in the CPO export levy policy but the outcome remains uncertain. The evaluation, he went on, aims to balance domestic needs and the financial health of the Palm Plantation Fund Management Agency.

“The outcome will depend on the review process,” Dida explained.

Previously, on September 11, 2024, Finance Minister Sri Mulyani signed a new tariff policy imposing a 7.5% export levy on CPO, based on a reference price set by the Trade Ministry. This policy, outlined in Finance Minister’s Regulation Number 62/2024, took effect on September 21, 2024.

Additionally, export levies for palm kernels and palm kernel cake are set at US$25 per ton. Derivative palm products face export levies of 3%, 4.5%, and 6% of the Ministry of Trade's reference price.

The Central Statistics Agency (BPS) reported a 26.39% annual decrease in Indonesia's CPO exports in August 2024. This was reportedly due to less competitive palm oil prices and global economic challenges.

Hammam Izzuddin contributed to the writing of this article.

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