28/04/2008 (Trading Market) - The Indonesian government said it will cut the export tax on crude palm oil (CPO) from 20 per cent to 15 per cent in May to follow a decline in the prices of that commodity on the international market.

The export tax was set at 20 per cent in April, up from 10 per cent in the previous month when the price of that commodity shot up to as high as US$1,395 in March.

The government has imposed a progressive tax system on CPO setting the tax rates based on price developments on the international market.

The taxation system is aimed at forcing producers to sell part of their production on the domestic market to feed local industries.

Trade Minister Mari Elka Pangestu said the prices of CPO derivatives have also declined on the international market.

According to the Central Bureau of Statistics Indonesia's exports of CPO and derivatives fell 34.85 per cent to US$1 billion in February from US$1.6 billion in the previous month.

This year Indonesia is expected to produce 18.4 million tons of CPO and around 14.5 million tons will be exported. -ANTARA-