Zero Export Levies Give Second Wind for Palm Oil Producers

Jakarta Globe
July 19, 2022 | 2:14 am
SHARE
A farm worker carries palm fruit bunches at a plantation in Sukabumi, West Java, on July 13, 2020. (Antara Photo/Raisan Al Farisi)
A farm worker carries palm fruit bunches at a plantation in Sukabumi, West Java, on July 13, 2020. (Antara Photo/Raisan Al Farisi)

Jakarta. Shares of Indonesian-listed palm oil producers rallied Monday after the government dropped export levies on all palm oil products and their derivatives until August 31, 2022. 

Gozco Plantations saw its share price increase 8.33 percent to Rp 143 a piece as the trade session closed on the Indonesian Stock Exchange (IDX). Dharma Satya Nusantara shares were up 5.56 percent to close at Rp 494, followed by Astra Agro Lestari (5.32 percent), London Sumatra Indonesia (4.87 percent) and Salim Ivomas Pratama (4.52 percent). 

Minister of Finance Sri Mulyani Indrawati set the export levies for palm oil products to zero last week. Previously, export levies were in the range of $55-200 per metric ton. On September 1, the ministry will reinstate the levies to $55-240 per metric ton.

The ministry dropped export levies in a move to increase exports and reduce the country's high palm oil inventories following the export ban it imposed on the commodities last April. 

Advertisement

The controversial ban only lasted four weeks — from April 28 to May 22 — after showing some results in driving domestic cooking oil prices down. But, the policy also hurt oil palm farmers, who find it hard to sell their palm fruit bunches to processing plants due to excess supply. 

According to data from the Indonesian Palm Oil Association (GAPKI), the national stock of crude palm oil (CPO) as of early July 2022 has reached 7.1 million tons or is on the threshold of overstock. This high stock, in the end, makes the processing plants limit the purchase of palm fruit so that farmers find it difficult to sell fresh fruit bunches (FFB).

Analysts said the temporary abolition of export levies can provide positive sentiment for CPO companies, at least in, the short term as the companies now can keep all most of the proceeds of their exports. 

At today's CPO price of  $870 per metric ton, the companies would have paid $115 for each ton of CPO they export if the export levies were still applied.

"Surely, [the policy] will also drive the performance of palm oil companies and become a positive sentiment for stock price movements on the trading floor," Hans Kwee, the director of Anugerah Mega Investama, said on Monday. 

"Actually, now is a good time to unleash more [CPO] export to compensate for the drop in the commodity's price," he said. According to Bursa Malaysia data, palm oil futures has dropped 55.5 percent from their peak in March. 

Tags: Keywords:
SHARE

Related Articles


News 22 hours ago

Towering Banknotes on Display as AGO Seizes $728 Million in Palm Oil Graft

The AGO seizes $675 million from Wilmar units in CPO export graft case; judges accused of taking bribes to acquit firms
Business Jun 9, 2025 | 7:15 pm

Dharma Satya Sets Rp800b Capex for Palm Oil Replanting, Renewable Energy

DSNG sets Rp800b 2025 capex for palm oil replanting, green energy, and upgrade. Company books Rp367b Q1 profit on strong CPO prices.
Business Apr 16, 2025 | 10:36 am

‘We Might Lose Our Customers’: Gov’t Told to Cut Palm Oil Export Duty as US Tariff Looms

Fellow palm oil producer Malaysia not only has lower export costs, but it gets a 24 percent US tariff rate -- far below than Indonesia's.
Business Feb 18, 2025 | 10:14 am

Indonesian Palm Oil Export Sees Double-Digit Drop to $1.44 Billion

Indonesian CPO exports had fallen 24.1 percent from $1.89 billion in December 2024 to $1.44 billion the following month.
News Feb 14, 2025 | 3:34 pm

Climate Change Costs Palm Oil Industry Billions in Lost Yields

Climate change threatens palm oil yields in Indonesia and Colombia. Scientists develop drought-resistant varieties to secure production.
News Feb 14, 2025 | 8:31 am

Indonesia’s Palm Oil at Risk as Rising Temperatures Kill Pollinating Beetles

Climate change is endangering Elaeidobius kamerunicus, the primary pollinating beetle for oil palm.
News Feb 13, 2025 | 12:56 pm

ICOPE 2025: Government Urges Sustainable Palm Oil Practices to Curb Deforestation

At ICOPE 2025, officials called for integrating palm oil cultivation with forest conservation to curb deforestation.
News Feb 12, 2025 | 12:18 pm

WWF-Indonesia: Conservation and Palm Oil Can Coexist

WWF-Indonesia pushes for sustainable palm oil with traceability, conservation, and certification efforts at ICOPE 2025 in Bali.
Business Feb 12, 2025 | 10:38 am

ICOPE 2025: Striking a Balance Between Palm Oil Growth and Sustainability

Indonesia pushes for sustainable palm oil at ICOPE 2025, balancing growth & environment with ISPO certification & eco-friendly practices.
Business Jan 31, 2025 | 1:45 pm

Indonesia to Set Up Watchdog for B40 Biodiesel 

The team will make sure whether the biofuel has a 40 percent palm oil blend.

The Latest


News 20 minutes ago

Student Enrollment in Jakarta Public Schools Hits Overcapacity

Jakarta sees 277,231 students apply for public schools, 196% over capacity. Officials say registration runs smoothly despite the surge.
Business 47 minutes ago

Bank Indonesia Holds Benchmark Rate at 5.5 Pct

Bank Indonesia keeps key rate at 5.5%, citing stable inflation and rupiah.
Business 1 hours ago

Danantara Redefines How Indonesia Funds SOEs

Danantara reshapes SOE funding by reinvesting Rp150t in dividends into strategic projects, ending reliance on direct state budget support.
News 1 hours ago

Mount Lewotobi Spews Ash for Kilometers, East Flores Residents Evacuated

Mount Lewotobi erupts in East Flores, sending ash 10,000 meters high. Alert raised to max level, over 4,800 people evacuated.
News 2 hours ago

Indonesia to Evacuate Hundreds of Citizens from Iran if Conflict Worsens

There are 386 Indonesians currently residing in Iran, many of whom are students in Qom.
COPYRIGHT © 2025 JAKARTA GLOBE. ALL RIGHTS RESERVED