Indonesia may keep its palm oil export tax at zero percent in May, despite a recent rise in palm oil prices, Trade Minister Mari Pangestu said on Thursday. "It looks like CPO exports in May will not be taxed. In other words, the export tax will be kept at zero percent," Pangestu told repoters.
"Based on our calculation, the average CPO price over the past month was still below $700," she added. Indonesia does not tax palm oil exports until the minimum reference price hits $700 a tonne. The government uses the average spot price of crude palm oil in Rotterdam, Europe's vegetable oils market, during the preceding month, as the reference price. On Wednesday, the CPO price in Rotterdam edged down $15 to $705.
Palm oil physical prices normally track Malaysian palm futures, which have surged 46 percent this year amid fears of sharp falls in palm stocks in the world's second-biggest producer. Indonesia, the world's top producer of palm oil - which is used in a wide range of products, from soap to biodiesel - is forecast to produce 19.7 million tonnes of the commodity in 2009, against 18.7 million in 2008, the government has estimated.
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