CPO Export Volume Remains High

24-JUN-08

JAKARTA: CPO producers states export volume will remain high despite their worries that the government will apply a 20% export tax in July.

Chairperson of the Association of Indonesian Oil Palm Businesses (Gapki) Akmaluddin Hasibuan said crude palm oil price in Rotterdam had been steadily increasing and was estimated to hit US$1,200 per ton.

Data by the Department of Trade showed CPO price in Rotterdam for July-September shipment reached US$1,195 per ton on June 23. However, the position was still below US$1,220 per ton on June 2.

"We have anticipated the price increase in Rotterdam and a 20% export tax in July. To be sure, we have to keep exporting," he informed Bisnis yesterday.

According to him, export was a must since domestic cooking oil supply was sufficient and producers could reap up profits on the soaring international price.

He continued Indonesia was able to meet the total domestic cooking oil need of 4.45 million tons since its total production volume can reach 19.8 million tons. The Department of Trade targets CPO export volume in 2008 will reach 9.41 million tons.

The government this year sets to record US$7.6 billion in CPO export value, up by 22.45% from US$6.2 billion last year. CPO producers estimate CPO export volume can reach 13 million ton.

In the meantime, the government applies progressive export tax based on the CPO average price in Rotterdam. If the CPO average price is less than US$1,100 per ton, the government will apply a 10% export tax. However, if the CPO average price is more than US$1,100 per ton, the government will apply a 15% tax. Furthermore, if the CPO average prices are more than US$1,200 per ton and more than US$1,300 per ton, the government will raise the export taxes to 20% and 25%, respectively.

In June 2008, the government applies a 15% export tax to CPO with the CPO average price reaching US$1,105 per ton. (Bisnis/faa)