Production drops, CPO export duty up 42%
This article has been translated by PwC Indonesia as part of our Plantation News Highlights service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily
18 January 2023
Jakarta - The Trade Ministry has set the export duty for crude palm oil (CPO) products for the period of 16-31 January 2023 at US$74 per tonne, up 42% compared to the 1-15 January 2023 period at US$52 per tonne. The export duty increase was in line with the increasing CPO reference price for export duty determination and the Public Service Agency of the Palm Oil Plantation Fund Management Agency tariff (BLU BPD-PKS tariff) or export levy by 7.17% from US$858.96 per tonne to US$920.57 per tonne.
“Currently, the CPO reference price has increased and is returning away from the US$680 per tonne threshold. Therefore, referring to the current Minister of Finance Regulation, the government imposes a CPO export duty of US$74 per tonne and a CPO export levy of US$95 per tonne for the period of 16-31 January 2023,” said the Trade Ministry’s Director General of Foreign Trade Budi Santoso in his official statement on Tuesday (17/1/2023).
Budi said that this stipulation was stated in the Trade Minister Decree Number 53 of 2023 concerning Reference Price of Crude Palm Oil Subject to Export Duty and Service Fees of the Public Service Agency of the Palm Oil Plantation Fund Management Agency for the period of 16-31 January 2023.
The CPO export duty for the period of 16-31 January 2023 refers to Column Number 6 of Attachment Letter C to the Minister of Finance Regulation Number 123/PMK.010/2022 at US$74 per tonne. Meanwhile, the CPO export levy for the period of 16-31 January 2023 refers to Attachment Letter C to the Minister of Finance Regulation Number 154/PMK.05/2022 at US$95 per tonne.
The values of CPO export duty and export levy increased from those for the period of 1-15 January 2023. The increase in the CPO reference price was influenced by several factors, including changes in Indonesia’s biodiesel policy from B30 to B35, the strengthening of Malaysian ringgit against US dollar, and decreased CPO production due to the rainy season in Indonesia and Malaysia.
Meanwhile, based on data from the Malaysia Derivatives Exchange at the closing on Monday (16/1/2023), the CPO futures contract for February 2023 delivery increased by 13 Malaysian ringgit to 3,846 Malaysian ringgit per tonne. The March 2023 delivery contract strengthened by 9 Malaysian ringgit to 3,850 Malaysian ringgit per tonne.
Meanwhile, the April 2023 delivery contract rose by 7 Malaysian ringgit to 3,852 Malaysian ringgit per tonne. The May 2023 delivery contract increased by 9 Malaysian ringgit to 3,859 Malaysian ringgit per tonne. The June 2023 delivery contract improved by 12 Malaysian ringgit to 3,857 Malaysian ringgit per tonne. The July 2023 delivery contract strengthened by 17 Malaysian ringgit to 3,855 Malaysian ringgit per tonne.
