INDONESIA SAYS WON'T RAISE PALM OIL TAXES

JAKARTA, July 13 (Reuters) - Indonesia, the world's second largest palmoil producer, will not raise export taxes imposed on palm oil despite asharp rise in international prices and exports, a senior trade andindustry official said on Friday.Indonesian traders said the decision indicated a deal for palm oilcooperation set up in February with Malaysia, the world's number oneproducer, was on track. Part of the deal includes harmonising palm oiltariffs."There is a significant rise in international palm oil prices in thepast few weeks, but we won't raise the export taxes," the official, whoasked not to be named, told Reuters.Indonesian exporters said on Wednesday they were set to unload morepalm oil into the world market because of the rise in world prices.The trade official said the ministry would hike base prices, used tocalculate export taxes, to control exports."If we don't (increase the base prices) local prices of cooking oilwill continue to rise and exports will continue rising and there will be aproblem in the supply of cooking oil to domestic market," he said."God willing, we will issue the new base prices on Monday," he added.Cooking oil is a sensitive commodity in poverty-stricken Indonesia andsignificant shortages can lead to social unrest.Indonesia currently imposes a three percent tax on crude palm oil (CPO)and palm kernels, and a one percent tax on refined bleached and deodorised(RBD) palm oil, RBD palm olein and crude olein.Indonesia imposed the taxes to control the flow of palm oil exports,which usually rise sharply when the rupiah weakens and internationalprices increase.The official said the base prices should stand at 75 percent of FOBprices of palm oil.The base price of CPO currently stands at $190 a tonne.Indonesian CPO was traded at $260 a tonne FOB Belawan on Thursday. Itwas also traded at $326 a tonne cif Rotterdam on Thursday, from $282.50 atonne on Monday.