Indonesia’s palm oil fund management agency, BPDPKS, has signalled a move toward a more explicitly tiered export levy structure for crude palm oil, with rates indexed to the government reference price band. The intent is to dampen the volatility growers experience when international prices swing while preserving the levy revenue that underwrites the domestic biodiesel mandate.
Under the indicative structure circulated for consultation, the levy would step up at defined reference price thresholds, with the steepest increments reserved for price environments well above the cost of production. Refiners argue the design should preserve the existing differential between crude and refined product levies to protect downstream processing margins, an objective consistent with the long-running downstreaming policy. Smallholder representatives have pressed for a floor mechanism that shields farmgate prices when international benchmarks fall sharply.
The proposal interacts with the export duty administered separately by the Ministry of Finance and with the HPE reference price published periodically. Market participants caution that layering instruments raises compliance complexity for exporters classifying shipments under HS 1511.10 and 1511.90. A finalised schedule is expected after the consultation window, with implementation timed to a reference price review.