Indonesia duty hike will cause CPO exports to plummet

The Indonesian Palm Oil Association (Gapki) has expressed concerns over the government's plan to increase the duty on crude palm oil (CPO) exports to 10% next year, citing it as a threat to the competitiveness of local producers in the international market. Currently, the duty on CPO exports is 7.5%, while refined palm oil products incur a duty of 3 to 6% of the base price. Gapki fears that the new duty, along with the mandatory 40% palm oil-based biodiesel program starting in January, will lead to a decrease in overall CPO exports, especially with stagnant domestic production. This comes after Malaysia increased its CPO export duty to 9.5%.

The Indonesian Palm Oil Association (Gapki) has warned that a plan to increase the duty on crude palm oil (CPO) exports to 10% next year could make local producers less competitive in the international market. The government currently levies a duty of 7.5% on CPO exports, while a lower rate of 3 to 6% of the base price is applied to refined palm oil products. “The increase in export duty will make Indonesian palm oil exports less competitive compared to neighboring countries,” Gapki Chairman Eddy Martono said on Sunday. Coordinating Minister for Economy Airlangga Hartarto had earlier said the CPO export duty increase would help the government move forward with the mandatory 40% palm oil-based biodiesel (B40) program, which starts in January, The Star quoted him as saying. However, industry associations are concerned that the ...