Indonesia's latest move to hike the crude palm oil (CPO) export tax rate to a maximum of 25 percent from 10 percent previously could boomerang on the economy and even hurt local CPO producers, industry officials said. They said the tax hike would only push the global CPO price yet still fail to stabilize cooking oil prices in the domestic market. What is worse for the local industry is that the move could benefit its strongest rival, Malaysia.
According a Finance Minister Decree which took effect on February 7, the CPO export tax will be raised to 15 percent if the CPO export reference price rises to 1,100 dollars a ton or higher, but no more than 1,200 dollars per ton.The Trade Ministry normally sets the CPO reference price for the coming month based on the average CPO price in Rotterdam over the previous month.(http://www.antara.co.id/en/arc/2008/2/6/indonesian-producers-worried-cpo-tax-hike-may-boomerang-on-economy/)
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