PALMOILMAGAZINE, JAKARTA — Amid the turbulence of global commodity markets, the Indonesian government has set a new Reference Price (HR) for Crude Palm Oil (CPO) for June 2025 at US$856.38 per metric ton. While this may seem like just another figure to some, it reflects deeper market trends, global shifts, and the ever-evolving palm oil industry.
This marks a sharp decline of US$68.08 or 7.36% from May’s reference price of US$924.46/MT. The new figure results from a complex pricing formula based on data from three major exchanges: the Indonesian CPO Exchange, the Malaysian Exchange, and the Rotterdam port price. However, since the price variation between exchanges exceeded US$40, only the median prices from Indonesia and Malaysia were used to calculate the June HR.
Based on this price, the government has set the Export Duty (Bea Keluar) at US$52/MT and the Export Levy (Pungutan Ekspor) at 10% of the HR, or US$85.64/MT, in accordance with Minister of Finance Regulation (PMK) No. 38/2024 and PMK No. 30/2025, as well as Trade Minister Decree No. 1484/2025. This brings the total export tariff to US$138 per ton for June 2025.
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“Currently, the CPO reference price is approaching the critical threshold of US$680/MT,” said Isy Karim, Acting Director General of Foreign Trade at the Ministry of Trade, in a statement received by beige-heron-208544.hostingersite.com, on Saturday, May 31, 2025. “This decline must be monitored closely, as it could affect both state revenue and the competitiveness of our exports.”
What’s Driving the Decline?
The Ministry of Trade highlighted several global factors influencing the drop in HR this month. A surge in palm oil production in Malaysia has led to an oversupply in global markets. Meanwhile, India, the world’s largest palm oil consumer, has signaled reduced import demand due to sufficient domestic stockpiles and a shift towards alternative vegetable oils.
Adding to the pressure, the strengthening of the US dollar has made global commodity prices more expensive, further weighing down international CPO prices. For producers like Indonesia and Malaysia, this creates a dual challenge: maintaining export competitiveness while safeguarding national revenue.
RBD Palm Olein Remains Duty-Free
Despite the dip in CPO prices, not all palm-derived products are directly affected. Branded packaged cooking oil (Refined, Bleached, and Deodorized/RBD Palm Olein) weighing 25 kg or less remains exempt from export duty, as outlined in Trade Minister Decree No. 1485/2025, which lists the eligible brands.
This exemption is seen as a strategic policy move to stabilize domestic cooking oil prices and boost exports of higher-value downstream products. In the face of falling CPO reference prices, value-added derivatives may prove vital in sustaining foreign exchange earnings. (P2)
