Indonesia plans new incentives to boost palm oil exports: Deputy FinMin

 Indonesia plans to bring in new rules on its palm oil export levy and incentives soon to boost exports and empty storage tanks, an official said, the latest attempt to boost shipments after the ending of an export ban in May.

The government is still weighing up the rate of the new levy and the incentives, which will be applied temporarily to tackle a crisis over ballooning inventories, deputy finance minister Suahasil Nazara told Reuters, adding he expected the new regulations this weekend or by early next week.

"This temporary incentive is meant so that exports can flow so that tanks can be quickly emptied and farmers' fresh fruit bunches can be absorbed," he said in a text message.

The world's biggest palm oil producer has been struggling to cut inventories after a three-week export ban ending on May 23, aimed at controlling domestic cooking oil prices, boosted stocks.

The high inventory level has forced some mills to close and others to limit palm fruit purchases, pressuring the price of fruit for growers.

Angry farmers have repeatedly asked for export barriers to be removed to prop up prices.

Indonesian authorities will also increase the content of palm oil-based fuel in its biodiesel to 35% from 30% starting on July 20 to try to use up some of the excess oil. 

Since lifting the export ban, the country has cut export taxes and launched a shipment acceleration programme.

However, shipments have remained below normal levels as export permits are currently tied to mandatory domestic sales to ensure supplies of cooking oil. Exporters have also cited problems with finding cargo vessels.