Indonesia Launches Scheme to Speed Up Palm Oil Exports

CPO - JAKARTA. Indonesia has launched an export acceleration scheme aimed at shipping at least 1 million tonnes of crude palm oil and derivatives following a recent export ban, according to a trade ministry regulation made public on Thursday.

The regulation is effective immediately and the acceleration scheme applies until July 31.

If a larger shipment quota is required, the quota can exceed the 1 million limit, said the regulation, which was signed on June 7.

Indonesia, the world's top palm oil producer, allowed exports to resume from May 23 following a three-week ban aimed at shoring up local supplies of cooking oil and keeping runaway prices in check.

Shipments have been slow to restart, however, as exporters faced hurdles with new requirements designed to ensure domestic supply. The bottlenecks have irked farmers, who have struggled to sell palm fruits with many storage tanks at mills full.

Read Also: Apple to Fund Pay-later Loans Off Its Own Balance Sheet

"The acceleration programme is conducted by the government in order to maintain production stability and prices of fresh fruit bunches at planters level," the regulation said.

Indonesia's palm oil exports averaged between 2.5 million to 3 million tonnes per month prior to the ban, which came at a time of global uncertainty over vegetable oil supply.

The government is also lowering the maximum rate of export tax and levy for crude palm oil to $488 per tonne from $575 per tonne to encourage shipments.

Companies joining the export acceleration programme must provide information on their storage inventory, among other data, to the trade ministry's online platform.

After lifting the export ban, the government introduced a domestic sales requirement whereby palm oil exporters are given an export quota only after selling some of their products locally.