InfoSAWIT, JAKARTA — Amid the tumultuous global commodity market, the Indonesian government has once again set the Reference Price (HR) for crude palm oil (CPO) for the period of June 2025. The figure is striking, standing at US$ 856.38 per metric ton. For some, this may seem like just a series of numbers. However, behind it lies a narrative of market movements, global upheavals, and the ongoing dynamics of the palm oil industry.
The decline of US$ 68.08, or 7.36 percent, from the HR of May, which was US$ 924.46/MT, did not come as a surprise. This figure emerged from a complex calculation based on a formula referencing prices from three major exchanges: the Indonesian CPO Exchange, the Malaysian Exchange, and the Rotterdam port prices. However, due to price discrepancies exceeding US$ 40 between exchanges, only two median prices were utilized: Malaysia and Indonesia. Consequently, the HR for CPO in June was set at US$ 856.38/MT.
With this price, the government has established an Export Duty (BK) of US$ 52/MT and an Export Levy (PE) of 10 percent of the HR, equivalent to US$ 85.6384/MT. This determination aligns with the provisions outlined in two key regulations, PMK Number 38 of 2024 and PMK Number 30 of 2025, as well as the Minister of Trade's Decree Number 1484 of 2025. Thus, the total Export Duty and Levy for CPO for June 2025 amounts to US$ 138 per ton.
“The current HR for CPO is approaching the threshold of USD 680/MT,” stated Isy Karim, Acting Director General of Foreign Trade at the Ministry of Trade, in a statement received by InfoSAWIT on Saturday (May 31, 2025). "This decline must be monitored carefully, as it can impact state revenue and export competitiveness."
But what exactly is driving this decline?
The Ministry of Trade detailed several global factors shaping the HR for CPO this month. An increase in palm oil production in Malaysia, for instance, has led to a surplus in global supply. Simultaneously, India—one of the world's largest palm oil consumers—has indicated a reduction in demand due to sufficient domestic stocks and a policy shift towards other vegetable oils.
Moreover, the strengthening of the US dollar has also put pressure on commodity prices in international markets. For producing countries like Indonesia and Malaysia, this situation presents a dual challenge: maintaining competitive exports while ensuring state revenue does not plummet.
RBD Palm Olein Remains Untouched
Despite the decline in HR for CPO, not all palm oil derivative products are directly affected. Packaged branded cooking oil (Refined, Bleached, and Deodorized/RBD Palm Olein) weighing ≤ 25 kg is exempt from Export Duties. This is outlined in the Minister of Trade's Decree Number 1485 of 2025, which details the list of products granted exemption.
This policy is viewed as a strategic move to maintain the stability of domestic cooking oil prices while promoting the export of value-added downstream products. In a situation of declining HR, downstream products can indeed become a lifeline for foreign exchange. (T2)
