Indonesia mulls extending palm oil levy waiver

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Indonesia mulls extending palm oil levy waiver

JAKARTA: Indonesia, the world's biggest producer of palm oil, may extend an export levy waiver on edible oil to the end of this year, Indonesia's chief economic minister said on Tuesday that the country's largest producer of palm oil, Indonesia, has started waiving levies on imports of palm oil products from mid-July to help combat a three-week export ban in late April, which was designed to control local cooking oil prices.

The levy waiver policy is scheduled to end on October 31.

The plan is for an extension. Minister Airlangga Hartarto told reporters until the end of the year.

Indonesia collects export levies, on top of a separate export tax, to fund subsidies for its biodiesel and smallholders replanting programmes.

Airlangga said that Indonesia needs less funds for the biodiesel programme because palm oil prices have dropped and the cost of palm oil-based biodiesel is lower than fossil diesel fuel.

Airlangga said that the government would monitor the implementation of a so-called domestic market obligation policy, which was introduced earlier this year to ensure domestic cooking oil supply.

Exporters of palm oil must sell a portion of their products at home before being allowed to export. The amount they have sold domestically is now allowed by companies.