MARKET DEVELOPMENT
Indonesia’s Ley on CPO Exports Negative for Upstream Producers
Indonesia’s Ley on CPO Exports Negative for Upstream Producers
23/03/2015 (The Star) - CIMB Equities Research expects Indonesia’s plan to impose a levy of US$50 a tonne on exports of crude palm oil (CPO) at the zero export tax rate to be negative for upstream producers.
It said Monday that it would be positive for downstream producers and neutral to slight negative for integrated players in Indonesia in the short term.
“However, this could be offset by medium-term gains from higher CPO prices, if the tax collected can help boost biodiesel consumption significantly. Maintain Neutral. First Res, AALI and SIMP are our top picks,” it said.
CIMB Research was commenting on reports that Indonesia’s levy was to fund the biodiesel mandates.
“This is a departure from the earlier reported plans of lowering the CPO price threshold for the export tax. We think the new proposal will provide the government with more stable tax revenues at low CPO prices,” it said.
It said Monday that it would be positive for downstream producers and neutral to slight negative for integrated players in Indonesia in the short term.
“However, this could be offset by medium-term gains from higher CPO prices, if the tax collected can help boost biodiesel consumption significantly. Maintain Neutral. First Res, AALI and SIMP are our top picks,” it said.
CIMB Research was commenting on reports that Indonesia’s levy was to fund the biodiesel mandates.
“This is a departure from the earlier reported plans of lowering the CPO price threshold for the export tax. We think the new proposal will provide the government with more stable tax revenues at low CPO prices,” it said.