Govt Told to Cut CPO Export Tax

Banjarmasin, S Kalimantan (Antara) - Indonesian palm oil producers hope the government will lower the export tax on crude palm oil (CPO) to 3 percent, from the current 9 percent, to help offset a shortfall in global prices. The high export tax has burdened palm oil producers, Chairman of the Indonesian Palm Oil Producers Association (GAPKI) Joefly J Bahroeny said when inaugurating the provincial executive board of the association's chapter in South Kalimantan on Wednesday. "If the high export tax is aimed at encouraging downstream palm oil industries, the goal will be difficult to achieve because the national CPO needs only reach about 8 million tons per year," he said. Meanwhile, national CPO production currently reaches 28 million tons per year, as the country records a surplus of 20 million tons annually, he said. It is impossible to store a surplus of 20 million tons in Indonesia, he noted. If the government forces local producers to meet the demand from domestic industries, this will further burden palm oil producers due to overstocks, he said. "The large CPO production must be exported so CPO producers will not face heavier burdens. We demand that the government reduce the export tax, as other countries, including Malaysia, have done," he said. CPO production has been growing rapidly, not only in Sumatra but throughout the country. Indonesia is the world's largest CPO producer. (*)