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Indonesia will waive its palm oil export levy until the end of August in a fresh attempt to boost shipments and reduce its overflowing stockpiles.
The export levy is cut to zero from $200 a ton for crude palm oil starting from July 15, according to a rule posted on finance ministry website. The waiver also applies to other palm oil products.
The levy, which is payable to Indonesia Oil Palm Plantations Fund Management Agency, will return to $240 a ton if prices exceed $1,500 a ton by September 1.
The world’s biggest palm oil producer is seeking a way out of the impact of its decision to ban palm oil exports in April to rein in domestic food inflation. The halt in shipments, one of the biggest acts of crop protectionism since Russia’s invasion of Ukraine, led to overflowing stockpiles even after the government reversed course weeks later.
Since then, the government has taken steps to speed up exports and drain local supplies, but the resulting surge in shipments has sent global palm-oil prices plunging almost 50% from a record close in April. Palm is the most consumed of all edible oils and its price has a huge impact on the cost of rivals like soybean oil.
Benchmark futures slumped 14% this week. Indonesia’s palm oil exports surged in June to 1.76 million tons as shipments resumed, according to government data.