30/1/07 (TEMPO Interactive) Jakarta: A number of oil palm producers have acknowledged being concerned over the plan for limiting crude palm oil (CPO) exports.

This limiting of exports is to be applied by raising export taxes and setting export quotas.

Susanto, Director of PT Minamas Plantation, said that export tax hike and export restraints will make domestic CPO prices plunge.

The result would be that the price of fresh palm fruit stem will also go down.

According to Susanto, increasing export taxes by US$1 per ton will lower fresh palm fruit stem price by US$0.14 per ton.

However, annual fresh palm fruit stem production reaches 30 million tons.

In the mean time, the fresh palm fruit stem price is the standard for farmers’ incomes calculation.

“If stem price go down, so will farmers’ incomes,” said Susanto yesterday (29/1).

If fresh palm fruit stem price and farmer’s income decrease, the public’s interest in planting oil palm certainly will also go down.

“If so, Indonesia’s target to the biggest CPO producer will be difficult to achieve,” said Eddy Lukas, a Director of the PT Asian Agri Group.

Last week, the government promised to improve CPO policies this year so that the CPO processing industry can be developed.

But according to Industry Minister Fahmi Idris, the processing industry development requires up to five million tons of CPO per year up until 2010.

Agus Tjahjana, Secretary General of Industry Department said, export tax imposition was only an instrument in regulating CPO exports.

“The complete instruments must be discussed together,” he said.