The Government Will Review The Provisions For Palm Oil Export Charges

Palm Oil (Photo: dock. Antara)

JAKARTA - The government will review the provisions related to the export levy of palm oil (CPO) which is currently set at 7.5 percent, in order to increase the competitiveness of palm oil products in the international market amid the increasingly competitive price of other vegetable oils.

Deputy for Food and Agribusiness Coordination of the Coordinating Ministry for Economic Affairs, Dida Gardera, emphasized the importance of conducting routine evaluations of the CPO export tariff policy so that it remains relevant to market dynamics.

He explained that this review was based on two main considerations. First, the increase in the price of fresh fruit bunches (FFB) must go hand in hand with improving farmers' welfare. Second, keeping CPO prices competitive in the global market.

"We will evaluate regularly, every 3 months, every 6 months... It is possible (to change)," said Dida quoting Antara.

Dida explained that the evaluation of CPO export levies was not only based on competitiveness, but also took into account the domestic CPO needs and financial condition of the Palm Oil Plantation Fund Management Agency (BPDPKS).

He implies that the government is open to making adjustments to export levy policies next year, depending on the results of the review.

Palm oil export levies are levies imposed on exports of palm oil and its derivative products. This levy is used to finance oil and biodiesel replanting programs.

The government has adjusted the tariff for exports of palm oil products according to the Minister of Finance Regulation Number 62 of 2024 concerning the Service Tariff of the Public Service Agency of the Palm Oil Plantation Fund Management Agency, from the previous nearly 11 percent to 7.5 percent. This policy has been in effect since September 22, 2024.

The Pungutan tariff is imposed on palm oil plantation business actors who export oil palm plantation commodities, CPO or their derivatives; industrial business actors made from palm oil plantations; and exporters of palm oil plantations and/or derivative products.