12/10/05 JAKARTA (AFP) - Stockpiles of Indonesian crude palm oil (CPO) arebuilding up with buyers holding back purchases pending a new directive onexport tariffs, an industry executive said.
Derom Bangun, who chairs the CPO producers' association, told AFP therehave been no purchases so far this week as buyers await a regulationsetting a new reference price that was supposed to have been issued byOctober 10.
"We produce around one million tonnes of CPO per month and there are nowabout 200,000 tonnes piling up in storage at factories or plantations,"Bangun said.
The government currently charges a three percent export tax on CPOproducts at a reference price of 160 dollars per tonne. But it hasindicated that it is looking to increase the reference price to around 420dollars per tonne in line with rising international prices.
Producers have asked for a cut in the tax rate to one percent if thereference price is raised but the government has not so far responded.
Bangun urged the government to rapidly issue the decree on the tax rateand reference price to end confusion and avoid problems with mountingstocks.