PALM OIL - JAKARTA. Indonesia Palm Oil Association (GAPKI) expects this year's exports of palm oil to be lower than the 34 million tonnes recorded in 2021, due to various policy changes this year, official Fadhil Hasan said on Wednesday.
The country's production of palm oil in 2022 is expected to be at least similar to last year's output considering the "turbulent" policy environment, he said.
Last year, Indonesia produced 46.9 million tonnes of crude palm oil (CPO), while earlier this year GAPKI said they expected around 49 million tonnes output for 2022.
"We could have done better than that if the government had (imposed) better policies from the beginning of the year," Fadhil said.
To control soaring cooking oil prices at home, Indonesia has since November rolled out various price and export control policies, but with little success.
The world's biggest palm oil exporter on April 28 banned exports of palm oil in an attempt to flood the local market.
President Joko Widodo allowed exports to resume from May 23, but the government put in place a measure requiring companies to sell a portion of their products onshore before they are allowed to export.
Read Also: Indonesia to Cut Maximum Palm Oil Export Tax and Levy to a Combined $488/T
The latest change in Indonesia's palm oil policy is a lowering of the combined maximum level of export tax and levy to $488 per tonne from $575 imposed from March.
Trade Minister Muhammad Lutfi on Tuesday said the government would hike the maximum crude palm oil (CPO) export tax to $288 per tonne, but would lower the maximum export levy to $200 per tonne to encourage exports.
The world's biggest palm oil producer currently imposes a maximum $200 per tonne export tax and $375 per tonne levy.
"I think the levy of $200 is more than enough to finance all the programmes of BPDPKS, such as incentives for biodiesel mandate, other programmes such as replanting," Fadhil said, referring to the agency that collects and manages palm oil levies.
Indonesia collects a levy on top of tax on palm oil exports to help subsidise its mandatory B30 programme, which uses 30% palm oil blend in diesel fuel, and other programmes.
"If this measure is implemented, that's good for the industry, good for farmers in term of prices," he added.
