Band Bernadette Christina
JAKARTA, July 18 (Reuters) – Indonesia should export 6 million tonnes of palm oil until August if it is to bring its bloated stock levels back to normal, an industry association said on Monday, after the government waived its export tax for a month and half.
Over the weekend, the world’s biggest palm oil exporter scrapped a levy on vegetable oil exports through August and changed the details of the tiered levy rates for September, in a bid to boost exports and mitigate high domestic inventory levels.
Domestic stocks rose after Jakarta imposed a three-week palm oil export ban in April and May. The resumption of exports has done little to ease inventories, as the authorities have since May imposed mandatory domestic sales rules – known as the domestic market obligation (DMO) – to bolster the supply of oil from cooking.
The Indonesian Palm Oil Association (GAPKI) welcomed the levy waiver, but wanted it to be supplemented by the removal of the DMO, arguing that the industry has been severely disrupted by the storage crisis, forcing factories to limit palm fruit purchases and anger farmers just before the peak of the harvest season. .
“The most important thing until September is to clear the reservoirs and a smooth export flow must be the main objective,” GAPKI general secretary Eddy Martono told Reuters.
Indonesia currently has around 7 million tonnes of palm oil in reservoirs, including in makeshift floating storage facilities, he said.
During the peak harvest season, the country typically produces 3-4 million tonnes per month, which means that reducing stocks requires “twice as many exports or around 6 million tonnes at least until August”, Eddy said.
Prior to the export ban, Indonesia typically exported about 3 million tons of palm oil products and typically managed about 3-4 million tons of stocks.
Government officials did not respond to request for comment on GAPKI’s request to remove the rules from the DMO.
On Sunday evening, the Ministry of Economy released a statement saying that some of the progressive palm oil levy rates that will be applied in September will be lower than previous rates, in order to ensure “the distribution of added value”. in the palm oil industry.
Details of direct debit changes as follows:
CPO benchmark price
Samples from June 14 to July 14*
New direct debits from July 15 to August 31
Direct debits under the old rules will come into effect on August 1*
New direct debits from September 1
* Levy rates that have been revoked
(Reporting by Bernadette Christina Munthe; Writing by Gayatri Suroyo; Editing by Kanupriya Kapoor)
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