Indonesia will waive its palm oil export levy by the end of August in a new bid to boost shipments and reduce its glut of stocks, Bloomberg reports.
The export levy is being reduced to zero from $200 a tonne on crude palm oil from July 15, according to a rule posted on the finance ministry’s website. The exemption also applies to other palm oil products.
The levy, which is paid to Indonesia’s Palm Plantation Fund Management Agency, will revert to $240 a tonne if prices exceed $1,500 a tonne by September 1.
The world’s largest palm oil producer is seeking a way out of the fallout from its decision to ban palm oil exports in April to contain domestic food inflation. The halt in shipments, one of the biggest acts of crop protectionism since Russia’s invasion of Ukraine, led to stockpiles overflowing even as the government reversed course weeks later.
Since then, the government has taken steps to speed up exports and drain local supplies, but the resulting surge in shipments has sent global palm oil prices down nearly 50% from April’s record close. Palm is the most consumed of all edible oils and its price has a huge impact on the cost of its competitors such as soybean oil.
Benchmark futures fell 14% this week. Indonesia’s palm oil exports jumped to 1.76 million tonnes in June as shipments resumed, according to government data.
Source: Capital
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