JAKARTA (July 6): Indonesia is considering setting its crude palm oil (CPO) export reference price every two weeks instead of monthly, a senior Trade Ministry official said on Wednesday (July 6), aiming to adjust quicker to fast-changing international market prices.
The government currently sets a monthly reference price based on Indonesian, Malaysian and European CPO prices. That price is used to determine the palm oil export tax and levy each month.
"Within a month, the [global] price can be volatile. We are considering to set the export reference price by every two weeks," senior official Veri Anggrijono told media on Wednesday.
The Malaysian benchmark palm oil futures fell 22% in June and have slumped more than 20% so far in July, a result of Indonesia boosting exports and expectations of Malaysian production increasing, while global demand is sluggish amid recession concerns.
Veri did not give a time frame for when a decision would be made, but said authorities are hearing views from stakeholders, government bodies and industry participants about the proposal.
He said some businesses might find the two-week period burdensome as they may need to adjust their contracts at the same frequency.
Indonesia currently charges a maximum US$288 (about RM1,274.26) per tonne for export tax and until July 31 will charge a maximum US$200 per tonne export levy for when the reference price exceeds US$1,500 per tonne.