Indonesia's Palm Oil Export Tax at USD $18/Ton in February 2017
When Indonesia's benchmark palm oil price - a price that is adjusted every month - is set between USD $750 and $800, then a USD $3 per ton export tax is applied. However, when the benchmark price is set between USD $800 and $850, then the export tax rises to USD $18 per metric ton. Meanwhile, the Indonesian government had also imposed a USD $50 per ton levy two years ago (when palm oil prices remained low for a sustained period of time implying that the government failed to generate enough revenue from this sector). This levy still applies as well and therefore the competitiveness of Indonesia's palm oil shipments are somewhat undermined now.
Fadhil Hasan, Executive Director at the Indonesian Palm Oil Producers Association (Gapki), said the higher export tax may encourage local producers to sell more of their palm oil output on the domestic market, specifically to the domestic biodiesel industry. Reduced palm oil exports from Indonesia would also imply that global palm oil prices should rise.
Indonesia's Reference Crude Palm Oil Price:
|
Month |
2015 |
2016 |
2017 |
|
January |
669.4 |
557.2 |
788.3 |
|
February |
678.5 |
628.9 |
815.5 |
|
March |
662.0 |
618.8 |
|
|
April |
654.6 |
713.1 |
|
|
May |
653.2 |
703.1 |
|
|
June |
665.0 |
689.5 |
|
|
July |
630.6 |
658.0 |
|
|
August |
593.3 |
734.8 |
|
|
September |
526.9 |
768.6 |
|
|
October |
578.2 |
722.0 |
|
|
November |
552.2 |
743.2 |
|
|
December |
560.2 |
749.5 |
Source: Trade Ministry of Indonesia
Indonesian Palm Oil Production and Export Statistics:
|
|
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Production |
19.2 |
19.4 |
21.8 |
23.5 |
26.5 |
30.0 |
31.5 |
32.5 |
|
|
Export |
15.1 |
17.1 |
17.1 |
17.6 |
18.2 |
22.4 |
21.7 |
26.2 |
25.7 |
|
Export |
15.6 |
10.0 |
16.4 |
20.2 |
21.6 |
20.6 |
21.1 |
16.5 |
17.8 |
¹ indicates forecast
Sources: Indonesian Palm Oil Producers Association (Gapki) & Indonesian Ministry of Agriculture