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Indonesia will keep its crude palm oil export tax at zero for a third month in June, and its cocoa export tax at 5%. The June palm oil reference price fell to $568.94 per tonne from $635.15 in May.
The finance minister had earlier said the government planned to raise palm export levies by $5 to support biodiesel.
A zero export tax keeps Indonesian palm oil competitive on world markets, which supports exports and firm palm prices. The planned levy increase is a bullish signal for the biodiesel demand that competes with feed uses.
bworldonline.comCEDTyCleaMay 31, 2020After 548 past bullish policy events, Palm Oil moved a median +0.4% over 5 sessions (61% higher; middle half -0.7% to +2.1%), and +0.9% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Indonesia's zero export tax for June and a planned levy increase to support biodiesel signal firmer domestic demand and supply policy, which would support palm oil prices going into June 1.
Indonesia's decision on 2020-05-31 to hold its June palm export tax at zero and a sharply lower reference price is a same-day policy and cost signal for palm export competitiveness, though its direction is ambiguous.
