Indonesia Will Not Cut Export Levy on Palm Oil, Chief Economics Minister Says

Indonesia has decided not to make any changes to export levies on palm oil, Coordinating Economic Affairs Minister Darmin Nasution said on Thursday. (Antara Photo/Syifa Yulinnas)

By : Emily Chow | on 6:23 PM November 08, 2018
Category : Business, Commodities

Kuala Lumpur. Indonesia has decided not to make any changes to export levies on palm oil, Coordinating Economic Affairs Minister Darmin Nasution said on Thursday.

"Even though we have had discussions on the issue, we prefer not to change the policy on this area. There is no change," Darmin said at a press briefing in Kuala Lumpur.

"In the long term, I cannot confirm, but in the short term there is no change," he said.

Darmin said at an industry conference in Bali last week that Indonesia was considering a move to reduce the levy.

Indonesia, the world's top producer and exporter of the edible oil, currently slaps a levy of $50 per metric ton on crude palm oil, and a range of $20-$40 for refined palm products.

The Indonesian Palm Oil Association (Gapki) said last month that it had proposed cutting the palm oil export levy by $20 per ton until prices of the vegetable oil reach $700 per ton.

The government's reference price for crude palm oil has stayed below $750 per ton for over a year.

Speaking in Kuala Lumpur, Darmin said Indonesia decided against the cut in export levy as such a move would result in lower prices that would benefit consuming countries, not exporters.

The minister has in the past said Indonesia was considering reducing the levy to boost exports, which would then reduce stockpiles, but he said on Thursday that this would be achieved by boosting the use of biodiesel.

"Our policy is to increase the utilization of biodiesel, so of course, it takes time but I believe the result will be there in six months," Darmin said.

Reuters

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