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Palm oil export ban could cost state $1.4b a month
The government-imposed ban on exports of crude and refined palm oil is expected to cause significant revenue loss for Indonesia.
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Workers transfer crude palm oil to tanker trucks at the Tanjung Emas seaport in Semarang, Central Java, on April 7, 2022, for distribution to cooking oil packaging factories. (AFP/Daffa Ramya Kanzuddin )
T
he government-imposed ban on exports of crude palm oil and refined, bleached and deodorized (RBD) palm olein is expected to cause significant revenue loss for Indonesia.
Andrian Bagus Santoso, an economist with state-owned Bank Mandiri, said he expected the state to forgo revenue to the tune of US$1.4 billion should the ban be maintained for a full month. That estimate is based on an average 1.06 million tons of RBD palm olein exported each month at $1,300 per ton.
Similarly, Bank Permata chief economist Josua Pardede said RBD palm olein accounted for 50.3 percent of the total exports of crude palm oil (CPO) and CPO derivatives, with average monthly exports worth around $1.1 billion in 2021. He estimated potential foreign exchange losses at $700 million to 1.2 billion if the ban is implemented for a full month.
“The actual cooking oil production capacity is sufficient to supply domestic needs. With the export restriction, we expect there will indeed be oversupply in the country” he told The Jakarta Post on Wednesday.
Coordinating Economic Affairs Minister Airlangga Hartarto announced in a press conference late on Tuesday that the RBD palm olein export ban would apply to goods under the codes 15119036, 15119037 and 15119039 of the harmonized system (HS) nomenclature of global trade.
RBD palm olein exports under the three HS codes amounted to a combined 12.7 million tons in 2021, Statistics Indonesia (BPS) data show. In the first two months of this year, the export volume of goods under the three codes totaled 1.14 million tons.
India was the largest buyer over that period, with other top importers including Bangladesh, China and Pakistan.
