Area
Indonesia
Commodity Group
Oilseeds, oils and meals
Commodity
Palm oil
Date
01/01/2020
Policy Category
Trade
Policy Instrument
Export policy
Description
From January 2020 to February 2020: Reactivated following improvements in market prices the country\'s variable export dues on foreign palm oil sales. The export levy was reintroduced in January, while the export tax was reestablished in February 2020. The two export tolls had remained suspended since, respectively, November 2018 and March 2017, reflecting depressed market prices.
Notes
INDONESIA palm oil export tax & levy: With crude palm oil reference prices remaining below the USD 750 per tonne threshold that triggers export taxation, the countrys tax on palm oil exports remained suspended in December 2019 and January 2020. By contrast, the export levy that kicks in when prices exceed USD 570 per tonne has been re-activated on 1 January 2020 (NB: due to depressed prices, no levies had been collected since November 2018; even when prices started recovering in November and December of last year, the Government opted to maintain the levy at zero, in a bid to support exports see MPPU Nov.19). With the January reference price set at USD 730 per tonne, the levy collected on each tonne of palm oil exported will move in the USD 2050 range. In February, with palm oil benchmark prices rising for the first time in 33 months above the trigger-level of USD 750 per tonne, Indonesia reactivated its palm oil export tax. While, in February, exports will be taxed at a rate of USD 18 per tonne, the rate for March will be USD 15, in line with recent setbacks in market prices. As for the export levy, which was reactivated on 1 January 2020 (see MPPU Jan.20), the Government considered increasing its level to support the expansion of its biodiesel support programme, given the recent widening in the gap between the price of standard diesel and palm oil-based biodiesel. (NB: Currently set at a maximum of USD 50 per tonne, the levy was introduced in 2015 to finance government programmes on palm oil, notably biodiesel subsidies and an oil palm replanting scheme).
