InfoSAWIT, JAKARTA – The Indonesian government has officially set the Crude Palm Oil (CPO) Reference Price (HR) for December 2024 at USD 1,071.67 per metric ton (MT), marking a significant increase of USD 109.70 or 11.4 percent compared to November 2024's HR of USD 961.97/MT.
The decision is outlined in the Minister of Trade Decree No. 1617 of 2024, effective from December 1 to 31, 2024. This reference price also serves as the basis for calculating Export Duty (BK) and Export Levy (PE), managed by the Public Service Agency for the Palm Oil Plantation Fund Management Agency (BPDP-KS).
For December 2024, the Export Duty is set at USD 178/MT, following Column 9, Annex C, of Minister of Finance Regulation No. 38 of 2024. Meanwhile, the Export Levy is determined at 7.5 percent of the reference price, amounting to approximately USD 80.38/MT, as per Annex I of Minister of Finance Regulation No. 62 of 2024.
According to the Director General of Foreign Trade at the Ministry of Trade, Isy Karim, the HR increase is driven by a rise in global demand, particularly from India, Europe, and North America, amid stagnant production levels.
"The HR for CPO has climbed significantly, surpassing the USD 680/MT threshold. Consequently, the government has set the Export Duty at USD 178/MT and the Export Levy at 7.5 percent," Isy stated in an official release received by InfoSAWIT on Wednesday (4/12/2024).
Isy further explained that the HR calculation is based on the average prices from three main markets: the Indonesian CPO Exchange (USD 1,019.97/MT), the Malaysian CPO Exchange (USD 1,123.37/MT), and the Rotterdam CPO Auction Market (USD 1,279.33/MT).
"According to Trade Ministry Regulation No. 46 of 2022, if the price difference among these markets exceeds USD 40, the median price is applied—calculated from the Indonesian and Malaysian exchanges. As a result, the HR for December 2024 is set at USD 1,071.67/MT," Isy explained.
Apart from rising demand, the HR increase is also influenced by global factors, including reduced global CPO production, a temporary CPO export ban from Thailand, higher domestic consumption in Malaysia, and a weaker Malaysian ringgit, which supports price hikes.
In addition to CPO, branded refined, bleached, and deodorized (RBD) palm olein in packaging with a net weight of ≤ 25 kg is subject to an Export Duty of USD 48/MT, as per Minister of Trade Decree No. 1618 of 2024.
With this increase, the government aims to maintain market stability while supporting the development of sustainable palm oil, a key pillar of Indonesia's economy. (T2)
