JAKARTA: Indonesia will change the levy structure for palm oil exports, its finance minister said on Monday, cutting the ceiling rate for crude palm oil levies (CPO) from $255 to $175 per tonne after criticism from stakeholders.

Indonesian authorities have been weighing up for months whether to cut the crude palm oil export levy, which has been at its highest level for five months in a row, hurting demand.

"The tariff for export levy begins when prices are at $750 per tonne, with a $20 increase for every $50 rise in CPO," finance minister Sri Mulyani told a virtual media briefing.

The maximum tariff for when CPO prices are above $1,000 will be flat at $175, Sri Mulyani said.

The previous regulation stipulated a $15 levy increase for every $25 jump in crude palm prices. Sri Mulyani did not say when the new regulation would be issued, but said it would be soon.

The levy will rise $16 for palm derivative products.

Indonesia last year imposed higher levies on CPO to generate funds for its ambitious palm-based biodiesel programme, which has helped to sop up excess palm supply and support prices.

But the move raised concerns among analysts, traders and trade groups who warned that higher tariffs could impact demand for the versatile oil as consumers look at cheaper alternatives, while farmers say higher levies lower prices for their fresh fruit bunches.