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On October 4, the Chief Economic Minister of Indonesia announced that the country had planned to extend the export levy waiver on edible palm oil to the end of this year

AdobeStock 383475754Indonesia's export levy waiver on palm oil to be extended to year-end (Image source: Adobe Stock)

In a report published by Reuters, Minister Airlangga Hartarto stated that the significant drop in palm oil prices combined with the lower cost of palm oil-based biodiesel compared to fossil diesel fuel had resulted in Indonesia currently requiring lesser funds for the biodiesel programme. 

In addition to a separate export tax, the country, known to be the world’s biggest producer of palm oil collects export levies to fund subsidies for its biodiesel and smallholders replanting programmes. 

Indonesia had initially started waiving levies imposed on palm oil product exports from mid-July, with the policy currently scheduled to end shortly after 31 October. The objective of the policy was to help reduce a stock surplus that had accumulated after a three-week export ban was imposed in late April to stabilise local cooking oil prices. 

Airlangga mentioned that the government would continue keeping a watch on the domestic market obligation policy. This meant that palm oil exporters would now be required to sell a portion of their products at home before being permitted to export and companies would now be allowed to export nine times the amount they have sold domestically.