26 November 2024

Deputy Chairperson of the Indonesian Employers Association (APINDO) of North Sumatra for Plantations and Agriculture, Usli Sarsi said that the Minister of Finance Regulation (PMK) Number 62 of 2024 concerning Service Tariffs of the General Service Agency of the Palm Oil Plantation Fund Management Agency which regulates the cutting of the Export Levy (PE) tariff on palm oil and its derivative products by 3.5% from 11% to 7.5% will increase the competitiveness of Indonesian palm oil producers in the global market.

He explained that PMK Number 62 of 2024 regulates five categories of export levies on groups of palm oil products and their derivatives. For Crude Palm Oil (CPO), which is included in Group I with specific tariffs according to the type of goods, Group II is 7.5% of the Ministry of Trade (MoT) reference CPO price, Group III is 6% of the MoT reference CPO price, Group IV is 4.5% of the MoT reference CPO price and Group V is 3% of the MoT reference CPO price.

In addition, PMK Number 62 of 2024 also changed the PE tariff on palm oil and its derivative products from a specific tariff to an advalorum tariff (a percentage of the Ministry of Trade's reference CPO price).

So far, the palm oil industry has been burdened with Domestic Market Obligation (DMO), Export Levy (PE), and Exit Duty (BK). “This is good news for palm oil industry players,” said Usli Sarsi who is also the President Director of PT Mahkota Group Tbk.

According to him, the lower levy policy with a unit rate of 7.5% for CPO will make Indonesian palm oil producers more competitive in the international market. In addition, this policy is expected to stimulate increased demand for palm oil from Indonesia in the global market.

“This policy will affect prices. PT Mahkota Group Tbk is still waiting for how the market responds to this regulation,” he said.