Source: Oleoscope (Russia)
Indonesia has lowered the export duty on palm oil to boost exports, Bloomberg reports. The world’s largest palm oil producer set the duty on crude palm oil at 7.5 percent of the base price, according to a decree published on the finance ministry’s website. The new regulation, which comes into effect on September 21, will reduce the duty on oil exports from 90 dollars in September to 63 dollars per ton. The duty on processed palm oil products will be between 3 and 6 percent.
The reference price for palm oil was set at 839.53 dollars per ton for September, down from 820.11 dollars in August. The total export duty in September was 142 dollars per ton, up from 118 dollars per ton in August.
Analysts believe the changes will help the Southeast Asian country become more competitive with neighboring Malaysia, the second largest palm kernel oil producer. This could increase pressure on palm oil futures, which have fallen more than 10 percent since peaking in Kuala Lumpur in April.
Indonesia imposes an export tax and a surcharge on palm oil exports. The levy, which is used to finance oil palm replanting programs and to subsidize biodiesel, was previously set monthly in US dollars. The prime rate for calculating the levy is a weighted average price based on the value of the palm oil and is set monthly by the Ministry of Trade to calculate export duties.
It had previously been announced that Indonesia must expect a 30% drop in palm oil exports due to the adoption of the new EU law on deforestation (EUDR).