Indonesia sets CPO reference price for February at $806.40/mt

31 Jan 2024 | Regina Koh

The Indonesian government has raised the crude palm oil (CPO) reference price for February 1-29 to $806.40/mt from the previous $774.93/mt, a circular issued by the trade ministry showed Wednesday.

The increase effectively raises the payable export levy and duty for CPO by one tier to $85/mt and $33/mt from $75/mt and $18/mt earlier based on the current export tax structure.

Export taxes for other palm oil products will also increase correspondingly, making Indonesian palm oil exports more expensive. 

Period Feb 1-29   Jan 16-31
CPO Ref Price $806.40/mt   $774.93/mt
Product Levy Duty Total Change Levy Duty Total
CPO 85 33 118 +25 75 18 93
RBD Palm Olein 65 2 67 +12 55 0 55
RBD Palm Oil 68 0 68 +10 58 0 58
RBD Palm Stearin 55 0 55 +10 45 0 45
Biodiesel 55 0 55 +10 45 0 45

Selected palm oil products and corresponding export taxes

As reported by Fastmarkets last week, the new reference price will apply for the whole month of February instead of half of the month as per previous iterations, and follows earlier deliberations by the government to change the frequency of the CPO reference price revisions from biweekly to once a month.

The change also aligns Indonesia's CPO reference price revision frequency with neighbouring Malaysia, who had earlier set its reference price for February at MYR3571.39/mt ($755/mt), with the corresponding export tax for CPO at MYR285.71/mt ($60.42/mt) (1 USD= 4.729 ringgit). 

Trade sources had also told Fastmarkets that the government was currently reviewing the formula for the reference price calculation to remove Rotterdam prices, though a decision has yet to be made.

The current formula uses a combination of CPO prices from Bursa Malaysia, ICDX and Rotterdam.