The Indonesian government has raised the crude palm oil (CPO) reference price for February to US$806.40/tonne from the previous US$774.93/tonne, AgriCensus reported the trade ministry as saying in a circular.
Based on the current export tax structure, the increase effectively raised the payable export levy and duty for CPO by one tier to US$85/tonne and US$33/tonne from the previous levels of US$75/tonne and US$18/tonne, the 31 January report said.
With export taxes on other palm oil products also increased, Indonesian palm oil exports were now more expensive, AgriCensus wrote.
As reported by Fastmarkets in the week before the announcement, the new reference price would apply for the whole month of February instead of half the month as previously and followed earlier proposals by the government to change the frequency of CPO reference price revisions from bi-weekly to once a month.
The change also aligned Indonesia’s CPO reference price revision frequency with neighbouring Malaysia, which had earlier set its reference price for February at MYR3571.39/tonne (US$755/tonne), with the corresponding export tax for CPO at MYR285.71/tonne (US$60.42/tonne).
Indonesia’s formula for the reference price calculation currently uses a combination of CPO prices from Bursa Malaysia, ICDX and Rotterdam, according to the report.
However, trade sources also told Fastmarkets that the government was currently reviewing the formula to remove Rotterdam prices, although a decision had yet to be made, AgriCensus wrote.