"If Indonesia does not do something its CPO will be in danger of losing its market foothold," Chairman of the Indonesian Association of Palm Oil Companies (GAPKI), Joefly J. Bahroeny, said.
Nusa Dua (ANTARA News) - Crude palm oil (CPO) export tax revision by Malaysia in 2013 is feared to weaken Indonesia`s CPO competitiveness in international market.

Indonesia and Malaysia, the world`s largest and second largest producers of palm oil, compete sharply in the world`s CPO market.

"If Indonesia does not do something its CPO will be in danger of losing its market foothold," Chairman of the Indonesian Association of Palm Oil Companies (GAPKI), Joefly J. Bahroeny, said here on Thursday.

Joefly, who spoke at the 8th Indonesian Palm Oil Conference (IPOC) and 2013 Price Outlook, said the export tax cut by Malaysian is a potential threat to Indonesian market especially in India.

The association, therefore, urged the Indonesian government to respond proportionally to the Malaysian`s move.

"We strongly appealed to the government to revise the CPO export tax, Joefly said

Malaysia decided to revise its CPO export tax partly because its downstream palm oil-based industries have has expanded rapidly, he said.

Malaysia plans to apply progressive export in 2013.

The tax would be 4.5 percent when the CPO price in international market is 2,250 to 2,400 Malaysian ringgits per ton and 8.8 percent when the price is 3,450 to 3,600 ringgit per ton.

In the first nine months of 2012, CPO exports by Malaysia totaled 1.5 million tons , up 4.9 percent from 1.43 million tons in the first eight months of the year.

So far, Malaysia slaps a 23 percent tax flat on exports and export shipment not depending on the price of that commodity.

Agriculture Minister Suswono said the export tax issue would be discussed at an inter-ministerial meeting under the economic coordinating minister.

"We will discus it together as it concerns a number of ministries. I am aware that the issue need addressing that it would not cause a problem to development of our CPO industry," Suswono said.

He said he hopes that oil palm companies will continue development of domestic palm oil industry to expand market offset a decline in CPO demand in international market. (*)

Editor: Heru Purwanto
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