Indonesia’s CPO Reference Price Drops 1.13% in January 2025

Palm Oil Magazine
Indonesia’s CPO Reference Price Drops 1.13% in January 2025. Photo by: Pexels

PALMOILMAGAZINE, JAKARTA The reference price (HR) for crude palm oil (CPO), used to determine export duty (BK) rates and the Public Service Agency Tariff of the Palm Oil Plantation Fund Management Agency (BLU BPDP-KS), also known as the Export Levy (PE), for January 1–31, 2025, is set at USD 1,059.54/MT.

This marks a decrease of USD 12.13, or 1.13%, compared to the December 1–31, 2024, reference price of USD 1,071.67/MT. The determination is outlined in the Minister of Trade Decree No. 1685 of 2024 regarding the CPO Reference Price subject to Export Duty and BLU BPDP-KS Tariffs for January 1–31, 2025.

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The January 2025 CPO export duty is based on Column 9, Appendix C of Ministry of Finance Regulation (PMK) No. 38 of 2024, amounting to USD 178/MT. Meanwhile, the CPO Export Levy for the same period refers to Appendix I of PMK No. 62 of 2024, set at 7.5% of the reference price, equating to USD 79.4653/MT.

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Director General of Foreign Trade at the Ministry of Trade, Isy Karim, explained that the reference price is approaching the threshold of USD 680/MT. “Based on current PMK regulations, the government imposes a CPO Export Duty of USD 178/MT and an Export Levy of 7.5%, amounting to USD 79.4653/MT for January 2025,” said Isy Karim, as quoted by Palmoilmagazine.com.

The reference price is derived from average prices recorded between November 25 and December 24, 2024, on the Indonesian CPO exchange (USD 984.61/MT), the Malaysian CPO exchange (USD 1,134.47/MT), and the Rotterdam CPO auction market (USD 1,299.10/MT).

According to Ministry of Trade Regulation (Permendag) No. 46 of 2022, if the average price difference among these three sources exceeds USD 40, the HR CPO calculation uses the median and the closest price to the median. Based on this method, the January 2025 HR CPO was determined using prices from the Malaysian and Indonesian CPO exchanges, resulting in a reference price of USD 1,059.54/MT.

In addition, branded and packaged Refined, Bleached, and Deodorized (RBD) palm olein weighing ≤ 25 kg is subject to an export duty of USD 48/MT. This is outlined in Minister of Trade Decree No. 1686 of 2024 regarding the List of Brands for RBD Palm Olein in Branded Packaging Weighing ≤ 25 Kg.

The decline in the reference price is attributed to factors such as imbalances in global CPO production and demand, fluctuations in the prices of other vegetable oils, and the exchange rate of the Indonesian rupiah against the US dollar. (P3)

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