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Indonesia to set new CPO exports policy to increase competitiveness

The Indonesian government is reviewing its crude palm oil, CPO, exports policy to increased competitiveness with Malaysian products in order not to lose export markets, local media reported Thursday.

“the policy is still in discussions and we expect it will be issued in the near future, to compete the Malaysian new CPO exports policy,” said Minister of Agriculture Suswono, quoted by the Antara news wire.

He said the new or maybe the revised exports policy is to face competitiveness with Malaysian products. Starting January 2013, Malaysia cut its CPO export tariffs to compensate CPO price decline in recent months.

The final decision of the policy will be excecuted by Coordinating Minister for the Economy Hatta Rajasa. He expected Indonesia and Malaysia, as the world largest CPO producer countries, can work together side by side as world pricemaker in CPO.

The new CPO exports policy that imposed by Malaysia starting January 2013 potentially could harm Indonesia’s CPO in world markets, especially India as Indonesia’s main export destination of CPO.

Malaysia will adopt a progressive export tariffs by 4.5% when the CPO price reaches 2,250 to 2,400 Malaysian Ringgit ( around US$738.20 to 787.41) per metric ton and by 8.8% when the CPO price reaches 3,450 to 3,600 Malaysian Ringgit (around US$1,132.03 to 1,181.25) per metric ton.

Recently Malaysia raised export tariffs on CPO by 23%.

Commodities: Palm Oil Report, China Grains

Malaysian palm oil futures fell to a 2-wk low extending losses for a 3rd straight session as weak sentiment dominated the market with investors worrying about record high stocks Thursday.

Indonesia palm oil output in the world’s biggest producer Indonesia is expected to climb 7% next year to 27 million tons, a top industry association official said Thursday, as 3 yrs of acreage expansion efforts begin to bear fruit.

China will increasingly depend on overseas markets for its grain supplies as domestic production falls behind growing demand, the country’s top agriculture official said Thursday.