The government is considering reducing its levy on palm oil exports, Coordinating Economic Affairs Minister Darmin Nasution said on Thursday, as the country pushes to maintain its position in international markets for the commodity.
Speaking at an industry conference in Bali, the minister said an “adjustment” to the levy was among steps to be taken by the government, although he later said that this was still being discussed.
“We don’t have final position yet,” Darmin said on the sidelines of the event. “We have to calculate that carefully. We don’t want lowering it only to result in lower prices.”
Indonesia, the world’s top producer of the commodity, currently imposes a levy of up to $50 per metric ton on various palm oil products.
The Indonesian Palm Oil Association (Gapki) said last week that it had proposed cutting the palm oil export levy by $20 per ton until prices of the vegetable oil reach $700 per ton.
The government’s reference price for crude palm oil has stayed below $750 per ton for over a year.
Darmin said the government would discuss the levy adjustment intensively over the next two months, hoping to reach a decision around year-end.