Dynamics of Export Levy: Palm Oil Issuers Optimize Margin

Citing Bloomberg, the government is rumored to be cutting levies on exports of crude palm oil or CPO as an effort to increase exports.

Currently, the maximum CPO levy is US$225 per tonne if the reference price is set to exceed US$1,000 per tonne. According to a Bloomberg source who did not want to be named, the levy will be cut to US$175 per tonne for a reference price above US$1,000 per tonne. As an illustration, the reference price for CPO products for the determination of export duties (BK) for the June 2021 period is US$1,223.90 per tonne, an increase of 9.25% compared to the May 2021 period. Accordingly, the government imposes BK CPO at US$183 per ton for for the June 2021 period, also increased from the BK for the May 2021 period, which was at US$144 per tonne. Investor Relations of PT Sinar Mas Agribusiness and Food Tbk. Pinta S. Chandra explained that high CPO export duties can indeed reduce profits. "However, with an integrated business model, the company also produces and sells derivative products from CPO, so the company can benefit from the export duty rate for CPO derivative products which is lower than the CPO tariff," said Pinta, Monday (7/6). The issuer with the stock code SMAR will continue to improve its capabilities in producing various palm-based products with a broad portfolio and efficient supply chain. The Company also empowers innovation in science and technology to create competitive advantages, especially in terms of increasing productivity, cost efficiency and optimizing margins.

|•SOURCE•| Articles :POLITICS | Image :NESTLE |

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