POINTERS 2014 MPOC
Palm Oil Internet Seminar
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Section 1: Oils & Fats Supply, Demand and Outlook:
Indonesia's Palm Oil 2021 - Impact of Export Tax and Levy Revision
By: Mr. Togar Sitanggang

Mr Togar Sitanggang is the Vice Chairman of Indonesian Palm Oil Association/ GAPKI Since April 2018, Previously He served as Secretary General from April 2015 to April 2018. Currently, Mr Sitanggang works for PT Musim Mas as General Manager base in Jakarta. He has been in palm oil industries for almost 30 years with national and multinational companies including PT SMART Tbk, Cargill, Bunge, ED & F Man, Darmex in many positions ranging from research, logistics, trading and now corporate affairs. Mr Sitanggang is also active in palm oil related associations in Indonesia such as APROBI (Association of Biofuels Producers Indonesia), APOLIN (Association of Oleochemicals Manufacturer) and DMSI (Dewan Minyak Sawit Indonesia – Indonesia Palm Oil Board). Mr. Togar Sitanggang, was born in North Sumatera in 1966, graduated from University of Southern California, Los Angeles, USA, in Computer Science degree and obtained his Master Degree from North Sumatra University in Medan.
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We are still experiencing COVID-19 pandemic all over the world but demand for vegetable oil, especially palm oil from Indonesia is slowly returning. People are finding ways to "be friend" with the situation.

In the midst of returning demand, Indonesia palm oil industries realized that levy collected has resulted with high enough cash balance for the CPO Fund due to narrowing POGO spread during first semester this year. This situation created talks and discussions among stakeholders and finally requested Government to lower the levy tariff. The result was lowered levy which started July 2nd this year.

Since the new tariff implemented, POGO spread has slowly widened again with a strong increase of vegetable oil complex including palm oil. Depending where the crude oil price will go, the spread is possibly still widen for the rest of 2021 because vegetable oil complex is yet to see the bear.


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Questions & Answers (9) :
MEGAT SYAZWAN SHAH
7 months ago
Dear Mr Sitanggang, On the labour shortage issue, do you think Indonesia gov will consider to support Malaysia by sending TKI and does Indonesian still have the appetite to work in Malaysian Plantation?
Togar Sitanggang:
On labor issue, it is not on Indonesia govt decision at this point. If Malaysia open up her border for workers, I am sure Indonesian workers will return to Malaysia,
7 months ago
MEGAT SYAZWAN SHAH
7 months ago
Dear Mr Sitanggang With the recovery of Indonesia palm oil production in 2022, will Indonesia gov limit the export of palm oil to sustain the current price?
Togar Sitanggang:
Indonesia govt does not have any intention to limit export at this time. Palm Oil has been supporting our trade balance for may years and especially in recent months.
7 months ago
Jacquelyn Yow
7 months ago
Hi Pak Togar, 1. Can you share with us why does the Indonesia biodiesel export in Jul - Aug 21 had increased significantly? Do you foresee the biodiesel export continue to increase with the recent hike in crude oil prices? 2. For non-mandated biodiesel producers, what is the breakeven PO-GO spread for them to export biodiesel? Thanks Pak!
Togar Sitanggang:
Hi Jacquelyn, 1. Biodiesel export was not the only one increased during July-Aug.. most of the palm based commodities increased significantly and this due to delay shipment from June-July anticipating lower levy. Sept onward should be back to "normal". 2. As far as I know, all, or at least most of, biodiesel producers are included in the mandate. If one or two has not included, they would not be able to sell their biodiesel because buyers (Pertamina, Shell, etc) are buying biodiesel at Gasoil price. Hope this answer your questions.
7 months ago
HCLeow
7 months ago
Dear Pak Togar, Is there any price control on cooking oil price in Indonesia? Can the cooking oil producers fully transfer the hike in CPO price to consumers? Beside the impact from the dry season in 2019, do you think that the reduction in fertiliser also part of the factor that contributing to the unexpected low production in Indonesia? With the current high fertiliser prices, do you think the smallholders will cut the fertiliser application again? Thank you. Thank you.
Togar Sitanggang:
Hi HCLeow, Apologize not to answer this sooner. I have written the answers but did not hit "Post".. :) There is some control of cooking oil price in Indonesia with certain "price ceiling" but not really effective at this moment. The current production situation due to both dry season and lack of fertilizer in 2019. However, the current situation on fertilizer would effect production next years. Smallholders, even high price on fruit bunches, fertilizer is not available. I hope above answer your questions. Thank you
7 months ago
Clarence Tee
7 months ago
Can you explain the mechanism which Indonesia has which enable it to be able provide steep discounts for its refined palm oil in the international market.
Togar Sitanggang:
Sorry, I don't have answer for your question.
7 months ago
Ng Ivy
7 months ago
Hi Pak, what is your view on the President plan to ban CPO export from Indonesia? Do you think this will be implemented in the near term and implications? Are there sufficient palm oil refineries to cater to production.
Togar Sitanggang:
Hi Ivy.. the President 'plan' is actually is on going progress. our export portion of CPO has been reduced slowly since 2012 and now stand at around 12-15%. in 2021 CPO portion was 60-70%. of course this move is welcomed by refiners which now stand about 55-60mio mt per annum.
7 months ago
Ng Ivy
7 months ago
Hi Pak, Do you have the latest on the current CPO fund size? Is it sufficient to fund the biodiesel mandate
Togar Sitanggang:
Hi Ivy.. my estimate the CPO fund size is at around 30 trillion rupiah which is very sufficient until end of the year and maybe until Q1 or even Q2 2022.
7 months ago
WONG YQ
7 months ago
Biodiesel mandate seem like a good move for Indonesia for maximize palm oil benefit both food and energy utility. It similar like Brasil move sugarcane use in ethanol and sugar commodity. With the levy tariff implementation, it encourages the development of downstream palm oil refinery and oleochem players to be more competitive in world market. Will Malaysia MPOB follow this type of tariff implementation ?
Togar Sitanggang:
I can not speak on behalf my friends in Malaysia. However, the scheme that we have in Indonesia needs to have strong commitments from all stakeholders both in Government and in industry.
7 months ago
WONG HOOI PENG
7 months ago
Dear Mr. Sitanggang, Oil palm planters have benefited from the higher CPO prices. This could be partly due to successful implementation of biodiesel mandate in Indonesia. On another hand, consumers are paying higher prices of cooking oils and downstream products. Does the Indonesian government has any cut off point at which price biodiesel will not be blended into gasoil? TQ
Togar Sitanggang:
its a good question and this question has been lingering on my head since the system introduced. from past 6 years experiences with the fund management body and up-n-down on levy structures, it seems Government is yet to think about the cut off point at all. Govt is even putting higher blending rate for years to come. should this question be considered? in my opinion: YES.. but again.. I dont see it will be discussed in short term from now.
7 months ago
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