POINTERS: Indonesia's Palm Oil 2021 - Impact of Export Tax and Levy Revision

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Questions & Answers (9) :

MEGAT SYAZWAN SHAH

2 years 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,
2 years ago

MEGAT SYAZWAN SHAH

2 years 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.
2 years ago

Jacquelyn Yow

2 years 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.
2 years ago

HCLeow

2 years 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
2 years ago

Clarence Tee

2 years 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.
2 years ago

Ng Ivy

2 years 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.
2 years ago

Ng Ivy

2 years 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.
2 years ago

WONG YQ

2 years 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.
2 years ago

WONG HOOI PENG

2 years 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.
2 years ago