07/16/2002 (The Jakarta Post) - Palm oil producers called on thegovernment to remove the export duty on crude palm oil (CPO) in a bid tohelp boost the competitiveness of the commodity on the internationalmarket.The Indonesian Palm Oil Producers' Association (Gapki) said that theassociation had sent a letter to the Ministry of Trade and Industry urgingit to remove the prevailing three percent export duty on CPO.Gapki chairman Derom Bangoen said on Monday that the export duty wasintroduced last year by the government to discourage CPO producers fromexporting their products at a time when the price of cooking oil was at arecord high.CPO is the raw material used in the production of cooking oil, which isconsidered a strategic commodity in this country, where the people arepartial to fried food."The price of cooking oil is relatively stable now, but the government isstill maintaining the export duty on CPO,"Derom told reporters on thesidelines of Gapki's annual meeting.Many local exporters, said Derom, had complained that the export duty hadaffected the competitiveness of local CPO products on overseas markets."They (the exporters) can't lower the price of their CPO while competitorsfrom Malaysia are offering lower prices. This has created difficulties forlocal exporters,"he said.He said the association would also make a formal request to the financeministry to drop the export duty.The government imposed the export duty on CPO amid fears that rising CPOprices on the international market could prompt local producers to exporttheir palm oil.If this happened, it could have led to a shortage at home and furtherpushed up the price of cooking oil.Derom said that removing the export duty would also help increase theprice of palm fresh fruit bunches, which in turn would encourage farmersand plantation firms to boost production."So far, the low price for fresh fruit bunches has discouraged growers andplantation firms from expanding their plantations,"he said."How can we meet the government's export target of 10 million tons overthe next five years if there's no expansion in the plantation area,"headded.Indonesia, the world's second largest palm oil producer after Malaysia,aims to export some 5.5 million tons this year, up from 4.9 million in2001.

(The informations and opinions expressed in this article represent theviews of the author only. They should not be seen as necessarilyreflecting the views of Palm News