Indonesian exporters unfazed by Indian tax
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Indonesian palm olein producers have played down concerns over the impact of India's rising import duties, saying that demand from the biggest state buyer of Indonesian palm oil derivatives would stay robust.
Last month India removed its US$484 per tonne base price for its palm olein tax valuation, allowing the benchmark to float with the global market price, which currently stood at $1,050 per tonne, effectively doubling the value of duties that must be paid by importers to approximately $80 a tonne. “Actually, the one that will suffer the most from the policy is India,” said Hendri Saksti, the president director of Wilmar Indonesia, a local unit of the Singapore-based agribusiness giant Wilmar International. Saksti expressed his optimism that refined palm oil demand from India would remain unchanged as India, as one of the world’s major buyers of both refined and crude palm oil, “would have to import Indonesian palm oil products no matter what”.
Wilmar Indonesia produces 2 million tonnes of palm oil annually, of which 60 per cent is exported to China and India. The company’s commissioner, MP Tumanggor, acknowledged that the current global economic crisis would affect demand, albeit slightly.
“Even if there is any decrease in our sales, it will be no more than 10 per cent,” he told The Jakarta Post in an interview. Tumanggor said India’s new import duty policy would backfire, particularly hurting local cooking oil producers.
“The policy will make the price [of refined palm oil] more expensive, consequently killing India’s cooking oil manufacturing.
