Palm Oil Import: This move of Indonesia will stop the inflation of palm oil, consumers will get relief

Indonesia, the world’s largest palm oil producer, has announced a tax cut on the export of palm oil. Due to this, Indian consumers are expected to get some relief in the price. Because we import most of the palm oil from here. Indonesia’s Trade Minister Muhammad Lutfi said the government would reduce its maximum crude palm oil export and levy rate from $575 a tonne to $488 a tonne to encourage exports. Shankar Thakkar, national president of the Federation of All India Edible Oil Traders, said that reducing the export tax by Indonesia would be considered a good step for India. The prices of palm oil will be lower in the international markets, due to which there may be a reduction in the prices of things made from palm oil, which will directly benefit the general public of India.

Indonesia has allowed palm oil exports to resume after a three-week ban, but progress has been slow due to red tape, which has filled palm mills’ storage tanks. Farmers have complained that the prices of palm fruits have remained low as mills are still limiting their purchases. Therefore, the tax was cut to promote exports.

How much can export

After palm oil mills stopped buying palm fruits from farmers, industry groups have urged the government to allow a bigger export quota to clear the storage that was created during the export ban. Regarding this, Lutfi said that we are reviewing the proposal. Companies are allowed to export five times the amount of palm oil sold locally.

When was the export ban

Indonesia imposed a ban on 28 April to reduce domestic prices of palm oil. But due to the protest of the farmers, the export was started again on 23 May. Now by reducing the tax, its exports will increase and its benefit will be passed on to the consumers in the end. On the other hand, Indonesia’s farmers will also benefit from this decision.

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Decision regarding reduction in levy and domestic supply

According to the Federation of All India Edible Oil Traders, Lutfi has also announced to reduce the levy. Indonesia’s trade minister said the government would reduce the maximum levy to $200 a tonne. Indonesia currently charges a maximum levy of $375 per tonne. To ensure a safe domestic supply of palm oil after the ban on exports is lifted, the government has put in place a policy that states that producers must sell a portion of their products in the local market before being granted export permits.