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Indonesia's Ministry of Trade has set its crude palm oil (CPO) reference price for June at a level below the previous month's figure, resulting in a reduction in CPO export levies that will provide some financial relief to exporters operating under the current policy uncertainty.
The CPO reference price is calculated monthly based on a weighted average of prices from major global trading centers and serves as the basis for determining the export levy component of Indonesia's CPO export tax structure. A lower reference price mechanically reduces the per-tonne levy payable by exporters.
Industry sources indicated that the reduction in export levies was welcomed by producers and exporters, who have been facing significant financial pressures from the combination of uncertain export rights under the new DSI framework and the operational costs associated with navigating the disrupted tender processes.
However, the levy adjustment does little to address the more fundamental uncertainty hanging over the Indonesian palm oil export sector — namely, the lack of clarity about how the new state-controlled export system will operate in practice once the transitional period expires in 2027.
International buyers and trading houses have continued to press Indonesian authorities for detailed operational guidelines on the new export framework, warning that the ongoing uncertainty is causing them to increase their risk discounts on Indonesian palm oil cargoes and to diversify their sourcing toward Malaysian and other suppliers.
The combination of the lower reference price and export levy reduction is expected to support CPO futures prices at the margin in the near term, though analysts cautioned that the fundamental supply and demand picture will remain the primary driver of price direction.
