Indonesia cuts 1H February palm export taxes, levies
Indonesia has decreased export taxes and levies on palm products for 1-15 February after the crude palm oil (CPO) reference price for the same period dropped below $880/t, triggering the lower band of duties and levies.
The CPO reference price dropped by 4pc to $879.31/t for 1-15 February from $920.57/t for 16-31 January, according to Indonesia's trade ministry.
CPO will now be subject to a $52/t export duty, down from $74/t during the previous period, while an export levy of $90/t will apply on the same product, down from $95/t before.
Refined, bleached and deodorized (RBD) palm olein is now subjected to a $12/t duty and a $70/t levy, down from a $26/t duty and a $75/t levy. Palm oil mill effluent (Pome) exports are set to pay $7/t, down from a $8/t export duty, while the levy on this product is unchanged at $5/t. Biodiesel is still not subjected to any duties, but a $60/t levy is now imposed, $5/t lower from the previous period. Used cooking oil (UCO) exporters also do not need to pay any duties, but are subjected to a $35/t levy, unchanged from the previous period. Palm kernel shells (PKS) is subjected to a $6/t duty, $1/t lower from the previous period and an unchanged $3/t levy.
The lower reference price and resulting reduced export tax rates may have been set in an effort to appease Indonesian exporters of palm oil products that have seen their export costs increase after the government reduced the domestic market obligation for CPO, RBD palm olein and UCO to a 6:1 ratio from 1 January 2023. This has made some Indonesian products uncompetitive compared to Malaysian products, one exporter complained.
Indonesia currently uses the previous weeks' Bursa Malaysia CPO futures and delivered CPO prices to the Netherlands' Rotterdam in an unpublished formula to set its bi-monthly reference price. But trade minister Zulkifli Hasan recently urged the country to launch its own CPO benchmark by the middle of this year.
| Indonesia export duties as of 9 August 2022 | ($/t) | ||||
| Reference price | CPO | RBD olein | PKS | Biodiesel | Pome |
| Up to $680 | 0 | 0 | 3 | 0 | 1 |
| $680-730 | 3 | 0 | 3 | 0 | 2 |
| $730-780 | 18 | 0 | 4 | 0 | 4 |
| $780-830 | 33 | 2 | 5 | 0 | 5 |
| $830-880 | 52 | 12 | 6 | 0 | 7 |
| $880-930 | 74 | 26 | 7 | 0 | 8 |
| $930-980 | 124 | 71 | 8 | 32 | 10 |
| $980-1,030 | 148 | 88 | 9 | 35 | 11 |
| $1,030-1,080 | 178 | 104 | 10 | 37 | 12 |
| $1,080-1,130 | 201 | 118 | 11 | 71 | 14 |
| $1,130-1,180 | 220 | 137 | 12 | 73 | 15 |
| $1,180-1,230 | 240 | 140 | 13 | 77 | 17 |
| $1,230-1,280 | 250 | 150 | 13 | 82 | 17 |
| $1,280-1,330 | 260 | 160 | 13 | 88 | 17 |
| $1,330-1,380 | 270 | 170 | 13 | 93 | 17 |
| $1,380-1,430 | 280 | 180 | 13 | 98 | 17 |
| >$1,430 | 288 | 192 | 13 | 105 | 17 |
| Source: Indonesia finance ministry | |||||
| Indonesia export levies as of 1 November 2022 | ($/t) | |||||
| Reference price | CPO | RBD olein | PKS | Biodiesel | UCO | Pome |
| Up to $680 | 55 | 35 | 3 | 25 | 35 | 5 |
| $680-730 | 65 | 45 | 3 | 35 | 35 | 5 |
| $730-780 | 70 | 55 | 3 | 45 | 35 | 5 |
| $780-830 | 85 | 65 | 3 | 55 | 35 | 5 |
| $830-880 | 90 | 70 | 3 | 60 | 35 | 5 |
| $880-930 | 95 | 75 | 3 | 65 | 35 | 5 |
| $930-980 | 100 | 80 | 3 | 70 | 35 | 5 |
| $980-1,030 | 105 | 85 | 3 | 75 | 35 | 5 |
| $1,030-1,080 | 110 | 90 | 3 | 80 | 35 | 5 |
| $1,080-1,130 | 115 | 95 | 3 | 85 | 35 | 5 |
| $1,130-1,180 | 120 | 100 | 3 | 90 | 35 | 5 |
| $1,180-1,230 | 140 | 117 | 3 | 107 | 35 | 5 |
| $1,230-1,280 | 160 | 137 | 3 | 124 | 35 | 5 |
| $1,280-1,330 | 180 | 151 | 3 | 141 | 35 | 5 |
| $1,330-1,380 | 200 | 168 | 3 | 158 | 35 | 5 |
| $1,380-1,430 | 220 | 186 | 3 | 176 | 35 | 5 |
| >$1,430 | 240 | 204 | 3 | 194 | 35 | 5 |
| Source: Indonesia finance ministry | ||||||
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