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Regulations Of Indonesia Palm Oil Export Levy And Accusations Of ‘Policy’

JAKARTA (Reuters / B – Trams ) : Indonesia has significantly raised its maximum palm oil export levy, a new government regulation showed on Friday, marking a new bid to control domestic cooking oil prices after previous measures failed to tackle the problem.

The world’s biggest exporter of the edible oil a day earlier announced a surprise policy U-turn to remove export volume restrictions on palm oil products and raise its export levy instead.

Under previous rules, the maximum export levy was $175 per tonne, which kicked in when the reference price hit at least $1,000 a tonne.

Indonesia’s reference crude palm oil price for March stood at $1,432.24 per tonne.

The new regulation did not change the levy structure when the reference price is below $1,000 a tonne.

CPO reference price
Levies
>750-1,000
unchanged from previous structure
>1,000-1,050
175
>1,050-1,100
195
>1,100-1,150
215
>1,150-1,200
235
>1,200-1,250
255
>1,250-1,300
275
>1,300-1,350
295
>1,350-1,400
315
>1,400-1,450
335
>1,450-1,500
355
>1,500
375

The government has said it would use proceeds from levies to subsidise bulk cooking oil sales for the next six months, estimating about 202 million litres would bedistributed each month. The subsidy allocation was set at more than $500 million.

Indonesian exporters are required to pay an export tax on palm oil shipments on top of the export levy. The maximum export tax is currently $200 a tonne.

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