CPO EXPORTS TO REMAIN STABLE DESPITE EXPORT TAX: MINISTER

Jakarta, May 26 (ANTARA) - Trade Minister Mari Elka Pangestu said the value of crude palm oil (CPO) exports would become more stable in June 2009 than in the previous month although a tax would be imposed on CPO exports.

"We have carried out calculation with regard to the plan to impose an export tax. The value of the exports will remain stable though its volume will drop slightly. But the price will increase," the minister said here on Tuesday.

The trade minister said a progressive export tax formula was made by taking into account its impact on export performance and development in the cooking oil price at home.

"We have calculated its impact on exports and on the stability of the domestic price of cooking oil in the country," the minister said.

Previously, the trade minister had set the CPO export tax for June 2009 at three percent considering that the average price of CPO in Rotterdam, so far used as reference to set the CPO price, in May reached US774.93 per ton, while at the same time the CPO reference price was set at US$700 per ton.

The value that exporters would pay for their export taxes is three percent times the reference price.

The minister said that the imposition of CPO export tax at a time the price of CPO in the world market was increasing was effective to keep the stability of the cooking oil price at home.

She said that the export tax imposition was expected to restrict the flow of CPO exports so that frying oil supply in the country would continue to be guaranteed while its price would not sky rocket.

"It will be effective to stabilize the frying oil price. We learned a lesson last year when the CPO price fluctuated by 30 - 40 percent in the world market but at home they fluctuated by 17 - 20 percent only," she said.