Indonesia cuts 1H February palm export taxes, levies

Source:  Argus Media
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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uses the previous weeks’ Bursa Malaysia CPO futures and delivered CPO prices to the Netherlands’ Rotterdam in an unpublished formula to set its bi-monthly reference price.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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