CGS-CIMB Research analysts Ivy Ng Lee Fang, Peter Sutedja and Nagulan Ravi said the announcement did not come as a surprise, as the Indonesian government has indicated its plans to cut the levy since July 6 and is part of a series of measures taken to clear the current high palm oil stocks in Indonesia.
Indonesia’s temporary suspension of palm oil export levy will immediately increase domestic crude palm oil (CPO) and fresh fruit bunches (FFB) prices, according to UOB Kay Hian (UOB KH) analysts Leow Huey Chuen and Jacquelyn Yow.
Indonesia had announced the temporary suspension of the levy from July 15 to August 31 to boost exports and increase domestic prices. The analysts believe this move is also an effort to bring up domestic CPO and FFB prices to ease the pressure on smallholders.
