7/12/05 JAKARTA, (Asia Pulse) - In order to boost its crude palm oil exports, Indonesia, facing stiff competition from Malaysia, should lift its tax on CPO exports, or at least maintain the current CPO export tax at three per cent, instead of raising it, agricultural expert and former legislator, Imam Churmen said here Wednesday.

"As along as we can meet the need for four million tons of CPO at home, why don't we export the rest of our CPO production. In this case, the government should create conducive climate for encouraging our industry, not adversely creating constraints that would hamper our exports and make us difficult to compete," he said.

Indonesia's COP production at present is recorded at 13.3 million tons, while the need for the commodity at home is only about four million tons so that there is a chance to export about 70 per cent of production.

Churmen who is former deputy chairman of the House Commission on Agricultural Affairs, said there would be good demand for CPO in the world market in the future. "Unluckily, our CPO exports still have to face quota and export tax barriers," he added.

On the other hand, he added, Malaysia's CPO industry was progressing smoothly without constraints, so that it could, though with limited plantation areas, increase production through an intensification program.

PT Astra Agro Lestari, Benny Tjoeng, said previously that the government's decision to impose export levies on CPO exports and slow-going in fixing a new CPO reference price had created uncertainty and a decline in the CPO price as speculators had capitalized on the uncertainty to press down prices.

A new CPO reference price should have been fixed since last October 10, but no decision has been taken until now, causing fears among buyers to face a sudden announcement of a new reference price which would not benefit their stock.

Buyers are still waiting further developments and restraining from buying. If there are buyers who ventured to buy, they would ask for price discounts. Thus production stock is piling up, Benny said. (ANTARA)