Indonesia promises actionon palm oil smugglers

05 August 1998

Indonesia promises action
on palm oil smugglers

INDONESIA has promised to take action against smugglers of crude palm oil. It is one of several commodities, which are exported illegally, making a nonsense of government attempts to maintain low food prices.

Most of the smuggled product is taken out through northern Sumatra, home to some of the largest plantations.

Indonesia had banned palm oil exports up to May this year after the fall of the rupiah sparked a sharp rise in exports of palm oil. Under pressure from the International Monetary Fund, it then replaced the ban with a 40% tax to fill the gap between world prices and subsidised domestic rates.

The government raised the tax to 60% last month when a further drop in the rupiah made exports even more attractive, but cooking oil prices kept rising.

  • Financial Times 05/08/98 page 6

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