JAKARTA, Dec 11 (Reuters) -
Indonesia's trade ministry is resisting pressure from parts of the palm oil
industry to change its export tax system in response to planned tax cuts by
rival producer Malaysia, a junior minister said on Tuesday.
A proposed cut in crude palm oil
(CPO) export taxes by number two producer Malaysia due to come in next year
will make it easier for refiners or producers to ship out CPO when margins for
refined palm oil are low.
Malaysia's tax move came almost a
year after Indonesia, the world's top producer of the edible oil, reduced
export taxes on refined palm oil to boost its processing industry.
The Indonesian Palm Oil Association
(GAPKI), which represents mostly plantation firms, has called for a reduction
in palm oil export taxes to provide greater parity against Malaysian
competitors.
"GAPKI has been proposing that
the government changes the palm oil export tax structure," Deputy Trade
Minister Bayu Krisnamurthi said, adding that the proposal had not been
discussed with other ministries.
"The trade ministry has
suggested not changing the export tax scheme, but to invest in infrastructure
such as on storage tanks and increase domestic palm oil consumption."
The Malaysian government, in a bid
to entice customers, said it plans to cut export taxes for the crude grade to
8-10 percent from 23 percent early next year.
Indonesia has set its December
export tax for CPO at 9 percent and 3 percent for RBD palm olein.
On the downstream and processing
side of the industry, the Indonesian Vegetable Oil Association says it wants to
keep things as they are to maintain consistency in the business.
Last week, Achmad Suryana, director
general at the agency for food security in the Indonesian ministry of
agriculture, said initial talks had started between different ministries but no
decision had been made.
"A technical team has started
talking about the possibilities and what is best for Indonesia," Suryana
said, at a palm oil conference in Bali, adding that discussions would involve
the agriculture, trade and finance ministries.
