Crude Palm Oil (CPO) is an important commodity and the most popular oil among soybean, rapeseed, coconut and others. Indonesia has been the biggest CPO producer in the world since 2006.There are three major palm oil based industries in Indonesia such as cooking oil, oleo-chemical and bio-diesel. However, the development of palm oil based industries is not as fast as the CPO production itself. Most of the CPO produced in Indonesia has been exported to other countries. Indonesia has failed benefit from the abundance of CPO to be raw material in CPO processing industries. Therefore the government tried to encourage the palm oil based industries and limiting the CPO export.In order to encourage the palm oil based industries and limit the CPO export for the domestic supply, the government has imposed a CPO export tariff policy. This study tried to analyze the impact of CPO export tariff to the CPO export and the development of palm oil based industries in Indonesia. This study also tried to analyze the market and demographic factor that influenced palm oil based industries development in IndonesiaThe research found that this policy has a negative correlation on the CPO export, but the impact is very weak. The development of CPO industries is more likely influenced by the market and demographic factor.
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Impacts of CPO Export Tariff on the Industries in Indonesia