CPO Exports Levy Delay

By administrator | October 4, 2019 | Tax.
CPO Exports Levy Delay

CPO Exports Levy Delay

CPO Exports Levy Delay. The government delayed the export of crude palm oil (CPO) levy and its derivatives. In consideration, the Government does not want to make CPO and its derivatives increasingly depressed. Originally, this policy will take effect on October 1, 2019. However, the plan withdrew to January 1, 2020. The CPO producers welcomed the Government’s policy positively. Sinar Mas Agro Resources and Technology Tbk (SMAR) assesses the imposition of CPO exports levy to ease the burden of CPO industry.

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Because the current price of international CPO market is weakened and has an impact on corporations and farmers. Investor Relation SMAR, Pinta S. Chandra rate, the policy will provide support to the price of palm fruit in Indonesia. The composition of SMAR’s export sales was 40%-50% of total sales. Per 1H19, SMAR recorded sales of IDR 17.81 Trillion.

Mahkota Group Tbk (MGRO) assesses that if the levy is fixed out of the original schedule, then the CPO price at the farmer’s level will fall, because the CPO exporter will certainly reduce the price to get the profit after the levy is discharged. Moreover, CPO market prices are being depressed, said Elvi, Corporate Secretary of MGRO.

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B30 Program Effect. Nevertheless, the applicability of CPO levy starting from 2020 will coincide with the application of the 30% vegetable oil mixture or B30 to fuel oil (BBM) diesel type. Elvi argues that the simultaneous implementation is positive. Because, B30 will spur the use of CPO in the country so that the exporter does not depend on export market.

Tunas Baru Lampung Tbk (TBLA) is ready to welcome the B30 program. This company will increase the capacity of biodiesel plant in Lampung and projected finished at the end of 2020. Currently, TBLA has factories in Palembang, South Sumatera and Surabaya, East Java. TBLA expansion will increase the biodiesel processing capacity of 1,500 tonnes per day. Previously, the total capacity of TBLA biodiesel plant was only 1,000 tonnes per day.

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Vice President Director of TBLA, Sudarmono Tasmin said, annually, TBLA’s biodiesel production will increase from 300,000 tonnes to 750,000 tonnes. Demand from within the country, according to him, is already visible. TBLA claims to have received orders from Pertamina, AKR Corporindo Tbk (AKRA) and Shell. From overseas, TBLA can also request from China.

While manufacturers of biodiesel mix materials, SMAR fatty acid methyl ester (FAME) will not increase the capacity of the plant. Director of SMAR Agus Purnomo said, currently, the production of biodiesel is only 6 million-7 million tonnes per year of the industrial install capacity of 12 million tonnes per year. FAME’s sales contribute 15% to SMAR’s total revenue. All of the FAME is sold to the domestic market. For the international market, SMAR sells in the form of CPO which will then be process into biodiesel by overseas buyers.

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