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Indonesia delays palm levy, could come in two weeks
[JAKARTA] A regulation that will force exporters in Indonesia to pay a levy of US$50 per tonne on shipments of crude palm oil has been delayed, the finance minister in the world's top producer of the edible oil said on Sunday Earlier this month, Indonesian President Joko Widodo signed the regulation, which will require exporters to pay a tax of US$50 per tonne of crude palm oil (CPO) and US$30 for processed palm oil product shipments, with proceeds used to fund recently announced biodiesel subsidies.
Senior government ministers had said the levy would be introduced in the fourth week of May, but last week the Indonesian Palm Oil Association told Reuters that delays in establishing guidelines and a new biodiesel fund or agency meant this would be pushed back as far as August. "It's no problem," Finance Minister Bambang Brodjonegoro told reporters on Sunday. "When the BLU (Public Service Agency) is ready, it will be imposed," he said, referring to the public body that will collect the palm levy. "The BLU is under preparation. Hopefully it will be finished in two weeks." The move is being closely watched in global palm oil markets as any drop in supply from the Southeast Asian nation could buoy depressed prices.
Benchmark Malaysian palm oil futures fell nearly 15 per cent last year and currently trade at about 2,132 ringgit (S$792.5) per tonne on Monday.