GOVT URGED TO SCRAP 5% TAX ON CPO EXPORTS

Pontianak, W Kalimantan, Oct 21 (ANTARA) - Chairman of the West Kalimantan Chapter of the Indonesian Plantation Companies Association (GPPI) Ilham Sanusi has asked the government to scrap a 5 percent tax on crude palm oil (CPO) exports to keep down oil palm producers' losses.

"The selling price of CPO is currently only Rp1,000 a kg. Therefore, oil palm growers and exporters in West Kalimantan will go bankrupt unless the government takes rescue steps in six months' time at the latest," he said here on Tuesday.

He said fresh fruit bunches were not like rubber whose production quota could be kept down. "Lateness in harvesting fresh fruit bunches will reduce their quality so that this will cause losses unless proper solution is taken," he said.

In its meeting with West Kalimantan governor, the GPPI recommended that the government scrap the tax export, subsidize fuel oil for industries, and in the long run, think of building plants to process CPO into raw material which is ready for use.

He said CPO processing industries had complained about the recent drop in CPO prices which they said could lead to losses of billions of rupiahs from production cost.

West Kalimantan's CPO production currently stands at 800,000 tons per year.