Jakarta. Declining global vegetable oil prices and foreign demand had caused Indonesia to set a lower reference price in its crude palm oil or CPO, according to a senior official.

The Trade Ministry has set the reference price for CPO at $926.14 per metric ton for December. This marks a 3.9 percent decline compared to the $963.75 per metric ton set the previous month. Indonesia uses the reference price to determine the export duty and levies on palm oil products. Tommy Andana, a senior official at the Trade Ministry, said that vegetable oil prices had fallen, causing Indonesia to set a more modest reference price for its CPO.

"There is also a weakening demand from major importing countries like India. The strengthening of the US dollar and weakening global crude oil prices also led to the lower reference price," Tommy said.

This reference price brings the export duty to $74 per metric ton for this month. Export levy is at 10 percent of the reference price, thus around $92.6142 per metric ton.

The government usually sets the reference price based on the average trading price on three major exchanges, namely the Indonesian CPO Exchange, its Malaysian counterpart, and Rotterdam. The price per metric ton between Oct. 20 and Nov. 19 averaged as folows: $851.80 per metric ton (Indonesia), $1,000.48 (Malaysia), $1,203.74 (Rotterdam). As the gap between the three exchanges top $40, Indonesia uses prices from the Malaysian and Indonesian bourses.

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