Indonesia to Free CPO Export Levy Until the End of 2022

The Indonesian government will extend the exemption of export levies for crude palm oil (CPO) and its sub-products until the end of 2022. The exemption would initially take effect until Oct 31, as stated in the Finance Ministerial Regulation No. 130/PMK.05/2022 concerning the Indonesia Oil Palm Oil Plantation Fund Management Agency (BPDPKS) service rate. "The free CPO export levy has been extended until the end of the year," Coordinating Economic Minister Airlangga Hartarto confirmed as quoted by Reuters on Tuesday.

The exemption has been in effect since July 2022 to boost exports and reduce excessive stockpiles. The three-week export ban at the end of April, apparently implemented to stabilize cooking oil prices, resulted in the CPO surplus. However, due to price drops and the fact that the production cost of palm oil-based biodiesel is lower than that of diesel fuel, the funds allocated to support the biodiesel program are reduced, Airlangga explained. Furthermore, the government will continue to monitor the compliance of the domestic market obligation (DMO) policy to ensure the availability of cooking oil raw materials.