AreaIndonesia

Commodity GroupOilseeds, oils and meals

CommodityPalm oil

Date01/06/2021

Policy CategoryTrade

Policy InstrumentExport policy

DescriptionRevised the structure of Indonesia’s palm oil export levy, in an effort to improve the competitiveness of the nation’s palm oil industry. As of July 2021, once the per tonne market price for crude palm oil rises above USD 750 (as opposed to USD 650 before), a USD 55 per tonne levy kicks in – with USD 20 increments for every USD 50 rise in prices. The levy’s top rate – applicable when crude palm oil prices exceed USD 1 000 per tonne – was set at USD 175 per tonne (i.e. USD 80 less than under the previous scheme). In line with prevailing historically high benchmark prices, the levy stood at its top rate from July to October 2021.

NotesINDONESIA – variable palm oil export dues: In an effort to improve the competitiveness of the country’s palm oil exports, the Government revised its export levy structure for palm oil. Effective 2 July 2021, the top rate of the levy – applicable when crude palm oil prices exceed USD 1 000 per tonne – has been set at USD 175 per tonne, i.e. USD 80 less than previously. When market prices for crude palm oil surpass USD 750 per tonne, a USD 55 per tonne rate will kick in, and for every USD 50 per tonne increase in prices the duty will increase by USD 20 – which compares to a USD 15 increase for every USD 25 price rise under the previous levy structure (see MPPU Jan.’21). For refined palm oil, the levy increases by USD 16 for every USD 50 increase in prices. With the actual reference price for crude oil exceeding USD 1 000 in both July and August 2021, the levy stood at USD 175. Meanwhile, Indonesia’s palm oil export tax underwent the following adjustments, mirroring the latest development in benchmark prices: in May and June the per-tonne tax was raised to, respectively, USD 144 and USD 183, while in July and August the tax dropped to, respectively, USD 116 and USD 93. As a result of the above changes, the combined, per-tonne charges applied to crude palm oil exports stood at USD 438 in June, USD 291 in July and USD 268 in August.