InfoSAWIT, JAKARTA – The Indonesian government plans to review the palm oil export levy structure as part of its efforts to maintain the competitiveness of the commodity in global markets. This periodic review is part of the government's broader agenda to refine national trade policies.
Deputy for Food and Agribusiness Coordination at the Coordinating Ministry for Economic Affairs, Dida Gardera, stated that the review aims to enhance farmer welfare while ensuring that Indonesian palm oil remains competitive against other vegetable oils. “We must periodically evaluate the export levy structure to improve farmers' welfare and maintain global competitiveness,” Dida remarked during the seminar "Achieving Food, Energy, and Economic Sovereignty Through Palm Plantations for a Golden Indonesia 2045" organized by Rumah Sawit Indonesia (RSI) in Jakarta on Monday (18/11/2024).
Dida elaborated that the evaluation would be conducted every three to six months. However, he clarified that the government might not necessarily implement changes after each review, as adjustments would depend on the findings of the assessments.
The announcement comes in the wake of the last revision to Indonesia’s palm oil export levy structure in September 2024. The country’s export levy and tax structure are determined monthly, based on a government-set reference price for palm oil.
Indonesia’s palm oil policies are closely monitored by global markets. Last week, Malaysian palm oil futures saw an uptick due to expectations of changes in Indonesia's export levy policy. However, on Monday morning, prices dipped amid weaker prices of competing vegetable oils in the Dalian market and pressure from a stronger Malaysian ringgit.
As the world’s largest producer and exporter of palm oil, Indonesia’s policy decisions significantly influence global market dynamics. Regular evaluations of the export levy structure are expected to stabilize international prices while maximizing benefits for domestic industry players, particularly smallholder farmers.
Through these measures, the government aims to strike a balance between domestic priorities and maintaining a competitive edge in the international market. (T2)
