JAKARTA – The downstream palm oil industry players and growers urged the government to continue the scheme of palm oil export duty that is currently implemented based on the finance ministry regulation (PMK) No. 191/PMK.05/2020.
The export duty has been proven effective in generating the growth of downstream palm oil industries and maintaining the price stability of palm oil products, including the palm oil based cooking oil produced by the downstream industries and the fresh fruit bunches (FFB) produced by the oil palm growers.
“With the implementation of the current scheme of export duty, the exports of downstream palm oil products have been increasing significantly. So have been the investments in the national downstream industries. The downstream industries will create higher value added through the absorption of workers, taxes, and foreign exchange,” Bernard Riedo, the chairman of the Indonesian Vegetable Oil Industries Association (GIMNI), said in a press release issued on Monday, 24 May 2021.
The policy on the palm oil export duty as stipulated in the finance ministry regulation (PMK) No: 191/PMK.05/2020 is seen on the right track and in line with the national program of developing the downstream palm oil industry.
Bernard Riedo said that the scheme of higher export tariff for upstream products and lower export tariff for downstream products have significantly shored up Indonesia’s downstream palm oil products at the global market.
“GIMNI has asked the government to be consistent in implementing the PMK No. 191/PMK.05/2020 that has been effective since 10 December 2020. It is because the regulation has been proven able to increase the competitiveness of Indonesia’s downstream palm oil products, the oleo-foods and oleo-chemicals, at the global market. It has also maintained the price stability of palm oil for foods at the local market, which has led to the implementation of the downstream palm oil policy,” said Bernard.
Based on data from GIMNI, during the period of January – April 2021 the contribution of downstream palm oil exports to the total volume of palm oil exports reached 80% – 90%, while the export of unprocessed CPO & CPKO dropped to 10%-20%.
In January, the export of CPO and derivatives reached 2.861 million tons (24% Crude Oils/CO and Palm Processed Oils/PPO at 76%). In February, the volume of palm oil exports reached 1.994 million tons (crude oils 20% and PPO at 80%).
In March 2021, the export volume of palm oil products and derivatives reached 2.63 million tons (crude oils 12% and PPO 88%). In April, the palm oil export volume increased to 3.078 million tons (crude oils 10.6% and PPO 89.4%).
“The high contribution of downstream palm oil exports will give higher value added to the local industries of palm oil,” said Sahat Sinaga, director executive of GIMNI.
Sahat noted that the regulation of the palm oil export duty has created attractive incentives to encourage the exports of downstream palm oil products. As a result, the increase of value added in the downstream palm oil industry will create higher multiplier effects, which include the increase of foreign exchange, more job opportunities, and more taxes. “Very often such benefits are forgotten by Indonesia’s palm oil players,” he said.
“Since January until May 2021, the price of palm oil has been steadily rising. From the price of CPO tender at Rp9,900 per kilogram in Dumai, to the current price of around Rp11,700 per kilogram. The export duty has been also increasing in line with the increase of palm oil prices,” he said. (*)
Source: KONTAN.CO.ID | Featured image via asean-agrifood.org
