JAKARTA, June 4 (Reuters) - Indonesian authorities have yet
to decide on whether to cut their crude palm oil (CPO) export
levy, three officials told Reuters on Friday, as the levies
remained at their highest for five months in a row, hurting
Indonesia, the world's top producer of the edible oil,
raised CPO export levies last year to generate funds for its
ambitious palm-based biodiesel programme and smallholder farmer
replanting scheme, at the expense of demand.
"It is still being discussed ... the export levy needs a
review," Joko Supriyono, a member of the supervisory board of
BPDP, the government body in charge of subsidising palm oil
programmes, told Reuters.
"(We need to) consider market dynamics but also sustainably
support the biodiesel program and replanting programme," he
Musdhalifah Machmud, deputy minister of food and
agriculture, told Reuters that authorities routinely review the
levy but no decisions about cutting levies have been made yet.
Abdul Rochim, director general of the industry ministry said
the issue was being debated but nothing had been decided.
The levy was raised from a flat rate of $55 per tonne to a
price-dependent, progressive system of $55-$255 per tonne. For
June, it was set at $255 for the fifth successive month.
Analysts, traders and trade groups have warned that higher
tariffs could impact demand for the versatile oil as consumers
look at cheaper alternatives, while farmers say that higher
levies lower prices for their fresh fruit bunches.
But Indonesia's biodiesel policy, where it is mandatory for
diesel to be blended with 30% biocontent from palm, has helped
the country sop up excess supply of palm and has supported
Downstream sector industry groups showed support for a
higher levy for palm oil, which is widely found in consumer
products, saying it guaranteed supply and higher value-added
palm oil shipments.
Indonesia's CPO exports rose 18.7% in March year-on-year,
the country's palm oil association (GAPKI) reported last month.
GAPKI has not released data subsequent months.
(Reporting by Bernadette Christina Munthe; Writing by Fathin
Ungku; Editing by Martin Petty)