JAKARTA : Indonesia's palm oil industry is urging authorities to ease export restrictions and taxes so it can sell produce that risks going to waste, as an upcoming harvest season is likely to keep inventories at full capacity.
That caused palm prices to spike and wiped about $2 billion off export earnings for Southeast Asia's largest economy. Cooking oil prices have fallen below the government's target in Java and Bali but are above elsewhere, official data showed. Almost a million tonnes of fresh fruit bunches were left to rot in May and June, said Gulat Manurung, chairman of farmers group APKASINDO.
Further pressuring inventories, Indonesia is set to enter peak harvest season in August to September when it typically produces 4.5 million tonnes of crude palm oil a month, a third of which is usually used locally, the source said. The government has said DMO is not the problem. It has established an export quota of 5.4 million tonnes based on DMO but less than half has been used, said a spokesperson at the Coordinating Maritime and Investment Ministry.
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