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Palm Oil Fund To Continue Program Despite Halt Of Export Levies

The Indonesian Oil Palm Estate Fund (BPDP-KS) stressed that it would continue its program in 2019, despite the temporary removal of export levies due to the recent crude palm oil (CPO) price slump.

BPDP-KS finance, general affairs, compliance and risk management director Catur Ariyanto Widodo said recently that the fund had collected Rp 14.48 trillion (US$992 million) in export levies of CPO and other palm oil products from January until November in 2018, higher than projected levies of Rp 10.76 trillion.

An aerial picture of an oil palm plantation in Dumai, Riau. (Antara Photo/Rony Muharrman)

In 2017, the BPDP-KS collected Rp 13.05 trillion in export levies.

“Around Rp 1.49 trillion of fund will be distributed for 2019 programs,” Catur said, adding that up to the end of November, the BPDP-KS had distributed Rp 5.51 trillion for incentives of biodiesel incentives, replanting and research and development for oil palm farmers to boost production.

Spending on biodiesel incentives reached 70 percent of the total fund, spending on the replanting program reached 22 percent and the remaining funds were spent on research and development, human resources development, promotion and infrastructure, Catus said.

BPDP-KS replanting director Herdrajat Natawidjaja said the agency had not set a target for export levies next year amid unpredictable prices.

“We don’t dare to expect too much as we still don’t know the CPO price next year. But if this year situation continues to 2019, we will aim to collect Rp 14 trillion,” Herdrajat said, adding that the BPDP-KS had to start of trying to find other financial resources, such as third-party contributions and other types of financing schemes.

“If our levies are limited, our expenses will of course be limited, too. I hope we can secure financing for our operations next year, he added.


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