PALMOILMAGAZINE, Jakarta — Indonesian Palm Oil Association (GAPKI) Chairman Eddy Martono said export levies and taxes on palm oil are essentially transparent, as they are calculated directly based on government-issued reference prices. According to him, the current system leaves little room for manipulation because export duties are automatically determined at the time of shipment.
Eddy explained that when the government sets a reference price—such as around USD 850 per ton in a given period—export levies are immediately adjusted accordingly. “The export reference price is set by the government. That is the basis for calculating export taxes,” Eddy said during the Plantation Outlook 2026 webinar titled Assessing Palm Oil Prospects Amid Deregulation and Global Market Pressures, attended by Palmoilmagazine.com on Thursday (15/1/2026).
However, while the taxation mechanism is relatively clear, Eddy stressed that Indonesia’s palm oil industry still faces major structural challenges that must be addressed, particularly in governance, logistics efficiency, and persistent concerns over under- and over-invoicing practices.
Singapore as a Services Hub, Indonesia’s Logistics Still Lagging
Eddy pointed to Singapore’s long-standing role as a regional trading and services hub as a key factor influencing palm oil export chains. Although Singapore does not produce palm oil, he said it remains highly competitive in port services, trade facilitation, and logistics systems.
By contrast, several Indonesian ports continue to struggle with congestion, slow loading and unloading processes, and vessel queues—often resulting in costly demurrage charges.
“We still see frequent demurrage cases at some ports. What should take two or three days can stretch to a full week,” Eddy said.
He warned that such inefficiencies could encourage exporters to reroute logistics activities through Singapore, where facilities and service reliability are more established. In some cases, shipments could even be sent from Indonesia to Singapore first before being re-exported to final destinations.
Export Invoice Issues: A Need for Clarity
Eddy also addressed growing public discussion around discrepancies in export pricing records, particularly allegations related to under- or over-invoicing. He said he could not yet confirm the validity of such claims but emphasized the need for a clearer understanding of the issue.
In commodity trading, he noted, crude palm oil prices can fluctuate sharply on a daily basis, which can create gaps between transaction timing and recorded prices.
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He also referred to reports suggesting possible under-invoicing, where declared export prices appear lower than those recorded in destination markets.
“Some reports mention over-invoicing or under-invoicing. For example, shipments recorded at USD 900 per ton here but only USD 800 per ton at the destination. I cannot yet say exactly what is happening,” Eddy said.
He stressed that these issues must be clarified through stronger governance mechanisms to avoid harmful perceptions that could undermine the credibility of Indonesia’s palm oil sector.
GAPKI Urges Comprehensive Governance Reform
Eddy emphasized that improving governance across the entire palm oil industry is critical to strengthening Indonesia’s global competitiveness. He warned that weak governance could become a vulnerability exploited by external parties to pressure the domestic palm oil sector.
He compared Indonesia with Malaysia, which he said has a more structured regulatory framework despite having a smaller plantation area. Malaysia, he noted, operates under a strong centralized institution—the Malaysian Palm Oil Board (MPOB)—which plays a decisive role in overseeing the industry.
“MPOB requires companies to submit detailed production reports. If they fail to comply, sanctions can be imposed, even to the point of halting operations,” Eddy said.
He called on Indonesia to develop a similarly integrated and data-driven system to avoid regulatory overlap, improve transparency, and ensure continuous, effective oversight of the palm oil industry. (P2)
