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In the face of low palm prices, the government announced on Monday that it would temporarily lower export levies on palm oil and palm oil products, oil and palm oil. Order of 20 to 50 dollars per ton, in order to make its products more competitive.
However, the Indonesian Association of Vegetable Oils Industry (GIMNI) said that the government should not reduce taxes levied for ODP, but only for products derived from palm oil .
"The downstream domestic industry will not be encouraged to produce oleochemical and refined products as there is no incentive," said Sahat Sinaga, executive director of GIMNI.
Indonesia had previously set lower export levies for refined products in order to boost its downstream domestic industry.
The levies help fund the development of the country's palm-based biodiesel program, as well as funding for other palm oil programs, such as replanting.
According to Sinaga, many offshore oil refiners have in any case closed their factories in recent years and it is unlikely that the removal of the tax will eliminate the accumulation of palm fruit stocks at the same level. operating or falling prices.
However, Mukti Sardjono, executive director of the Indonesia Palm Association (GAPKI), said Tuesday that the temporary removal of levies would improve the competitiveness of Indonesian palm exports.
Indonesia competes with Malaysia for a share of global palm sales, but the market is currently saturated. Palm oil prices have fallen in recent months as trade restrictions imposed by the major Indian vegetable oil buyer resulted in an increase in inventories.
Indonesia will gradually increase levies when the price of palm oil reaches at least $ 500 per tonne, said a senior government official. The Palm reference futures in Kuala Lumpur at RMB 1,964 ($ 468.51) per ton at 3:40 GMT on Tuesday, a record level since August 2015. – Reuters
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