12 July 2021

The government's move to adjust the export levy (PE) rate for palm oil products by issuing Minister of Finance Regulation (PMK) No. 76/PMK.05/2021 on the Second Amendment to Minister of Finance Regulation No. 57/PMK.05/2020 on the Tariff of the Public Service Agency of the Palm Oil Plantation Fund Management Agency was welcomed by palm oil companies.

“This is the right step to increase the competitiveness of Indonesian palm oil products in the international market while still paying attention to the welfare of oil palm farmers. In addition, this step was taken to ensure the sustainability of service development in the national palm oil industry development program which includes improving productivity in the upstream sector through replanting oil palm plantations and creating a domestic market through mandatory biodiesel support,” said Chief Executive Officer (CEO) of PT Mahkota Group Tbk, Usli Sarsi, Monday (5/7).

The sustainability of the palm oil industry is very important considering that many business actors depend on this sector for their livelihood. PE with a tiered price limit will certainly spur Crude Palm Oil (CPO) exports without being burdened by the levy even though CPO prices are falling. Meanwhile, the PE CPO tariff can help the cost of replanting plantations and developing oil palm businesses managed by the government, including for oil palm farmers. That way it can improve the welfare of palm oil actors from upstream to downstream.

During this time, Usli said, Indonesia's CPO products were very dependent on exports, so prices were very vulnerable to being played by recipient countries. But now the government is slowly starting to release export dependence by managing CPO products into biodiesel.

With the revision of CPO export levies by the government, recipient countries can no longer arbitrarily increase the cost of CPO imports. . If CPO prices rise, export levies will automatically rise. If the recipient country also raises import tariffs, the price of CPO will be even higher, which of course will burden the recipient country. Countries that need CPO will inevitably reduce import tariffs.

“We are not worried that the higher the price, the less CPO exports,” Usli said.

The need for CPO, said Usli, continues to increase from year to year. Not only abroad, but also domestically. The results of CPO production in Indonesia are still unable to meet domestic and foreign needs. Indonesia still needs new plantation land to produce more CPO. Currently, only a few derivatives are processed from CPO, while there are still hundreds of products that can be produced from CPO materials. The proceeds of the CPO export levy will be used for sustainable palm oil development.

Eco-friendly

The palm oil industry, Usli said, is an environmentally friendly industry. The palm oil industry damages the environment in the form of a black campaign by outside countries to protect oil production from their plants and vegetables.

“Oil palm produces more oil than plants and vegetables. Likewise, from the comparison of land use, palm oil is less. European countries' oil production is not able to keep up with palm oil production,” Usli explained.

So far, the issue of palm oil is not environmentally friendly because it emphasizes the process. In the future, palm oil processing can be done by prioritizing environmental friendliness.

“We do palm oil processing with an environmentally friendly approach. We have planted oil palm in tidal areas and the results are very good,” Usli explained. (rin)

Source : analisadaily.com