The Indonesian government has announced that it will soon discuss a proposal to scrap the export tax slapped on crude palm oil (CPO).
Go deeper with GlobalData
While CPO exports make a welcome contribution to the nations coffers, domestic producers have found themselves unable to consider selling to foreign markets after the global price of CPO dropped and tankers’ rents increased.
This has meant that prices of fresh oil palm bunches fell even further at the farmers’ level, with supplies on the domestic market far exceeding the level of demand.
Wanting to restore the competitive edge of Indonesia in the global CPO market, industry and trade minister Luhut B. Panjaitan is to discuss the export tax with officials from the Indonesian Vegetable Oil Producers Association (Gapki), the body that made the proposal.
Panjaitan promised to encourage the export of CPO, one of Indonesia’s strongest commodities until the recent drop in prices, and while “the government has no plan to issue a decision abolishing export tax on CPO […] I and other economics ministers will discuss the proposal within the next few days.”
