AreaIndonesia

Commodity GroupOilseeds, oils and meals

CommodityPalm oil

Date01/11/2018

Policy CategoryTrade

Policy InstrumentExport policy

DescriptionDecided to suspend the country’s levy on palm oil exports, in a bid to maintain the products’ competitiveness in overseas markets.

NotesConcerned about the steady, sharp fall in palm oil export prices and its adverse impact on the country’s export-oriented oil palm industry, the Indonesian Government decided to suspend the country’s levy on palm oil exports, which amounts to USD 50 and USD 20–40 per tonne respectively for crude and refined palm oil. The move is aimed at maintaining the products’ competitiveness in overseas markets. Introduced in 2015, the levy is used to subsidize the country’s biodiesel programme as well as sector development activities, such as palm replanting schemes (see MPPU July’15). Reportedly, the levy will be reintroduced as prices rise: once palm oil prices recover to USD 500 per tonne, exports of crude and refined palm oil will be charged with, respectively, USD 25 and USD 5–10 per tonne, whereas levies of USD 20-50 will be collected when prices reach at least USD 550 per tonne.