Government imposes zero-dollar exit tax on CPO

Jakarta (ANTARA News) – The government has imposed a zero-dollar exit tax for crude palm oil (CPO) in June 2017, because the price of the commodity fell below US$750 per metric ton.

Director General of External Trade of the Ministry of Trade Oke Nurwan said here on Thursday that the Ministry of Trade fixed the reference price of CPO for exit tax at $723.37 per metric ton after taking various recommendations into account.

“Currently, the reference price of CPO fell again and remains below $750 level. Therefore, the government again imposed a zero-dollar exit tax per metric ton for the June 2017 period,” Nurwan stated.

The price declined by $8.64 or 1.18 percent from last May 2017, namely $732.01 per metric ton.

The rate is contained in the trade ministers Regulation No. 35/M-DAG/PER/5/2017 on the Rate of Export Reference Price on Agricultural and Forestry Products that are Subject to Exit Taxes.

In the meantime, the government of Indonesia last month had asked the Chinese government to increase its imports of CPO from Indonesia.

“We discussed cooperation to increase our CPO exports to China. China has a developed industry to produce biodiesel with 5 percent palm oil content. Chinas CPO requirement, therefore, would increase to feed its bio-diesel industry,” Foreign Minister Retno Marsudi said on May 14.

Retno remarked that President Joko Widodo raised the topic of Indonesian interest in increasing CPO exports to China during his meeting with Chinese President Xi Jinping.

She noted that the Chinese government gave a “positive” response to the Indonesian offer, adding “hopefully our exports of palm oil could be increased to supply the Chinese bio-diesel industry.”

Jokowi also asked China to invest in Indonesia industry to process CPO into derivatives called oleo-chemicals. Indonesia is the largest CPO producer, but it is still behind Malaysia in industry producing CPO derivatives. Malaysia is the second.

Source: Antara News