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R.E.A. Holdings plc: Correction - Further re selling prices

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R.E.A. Holdings plc (RE.)
R.E.A. Holdings plc: Correction - Further re selling prices
20-Jun-2022 / 11:59 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

R.E.A. Holdings plc ("REA" or the "company")

Further re selling prices

Further to the company's announcement in March 2022 regarding selling prices for crude palm oil ("CPO") and crude palm kernel oil ("CPKO"), the Indonesian government has published a change to the export duty structure with effect from 10 June 2022. There has been no change to the export levy structure.

REA sells CPO into the local Indonesian market which is not subject to export levy or export duty. However, arbitrage between the Indonesian and international CPO markets normally results in a local price that is broadly in line with prevailing international prices after adjustment of the latter for delivery costs and export tariffs and restrictions. Changes to export tariffs and restrictions therefore have an indirect effect on the prices that REA achieves on sales of its CPO

Export tariffs comprise export duty and export levy. Both are calculated on a sliding scale by reference to a CPO reference price that is set periodically by the Indonesian government on the basis of CIF Rotterdam and other recognised benchmark CPO prices. The export tariffs applicable from 10 June 2022 are set out below. The incremental export duty for CPO and CPKO have not changed up to a reference price of less than $1,000 per tonne but have increased from a reference price of more than $1,000 per tonne from the previous rules.

The CPO reference price is $1,700 per tonne for June and is expected to be $1,646 per tonne from July 2022 which, being above $1,500 per tonne, will result in total export tariffs of $663 per tonne. This represents an increase of $88 per tonne from the total export tariffs that were payable under the previous rules.

The domestic market obligation (“DMO”) was re-introduced in June at a factor of 1:5 local to export. In order to obtain an export permit exporters are required to prove, through online government systems, that their DMO has been complied with. These processes have been slower than anticipated which has led to high domestic stocks of palm oil and its derivatives. The government has subsequently introduced an export mechanism for the acceleration of distribution to optimise and stabilise the production of palm oil that involves paying an additonal duty of $200 per tonne which waives the DMO rules for exporters. This waiver program is valid until the 31 July 2022.

Combined export levy and export duty (before DMO waiver duty) applicable from 10 June 2022

CPO reference price

 

 

 

 

 

From

To

Levy

Duty

Total

 

Net price*

$

$

$

$

$

 

$

-

750

55

-

55

 

695

751

800

75

3

78

 

722

801

850

95

18

113

 

737

851

900

115

33

148

 

752

901

950

135

52

187

 

763

951

1,000

155

74

229

 

771

1,001

1,050

175

124

299

 

751

1,051

1,100

195

148

343

 

757

1,101

1,150

215

178

393

 

757

1,151

1,200

235

201

436

 

764

1,201

1,250

255

220

475

 

775

1,251

1,300

275

240

515

 

785

1,301

1,350

295

250

545

 

805

1,351

1,400

315

260

575

 

825

1,401

1,450

335

270

605

 

845

1,451

1,500

355

280

635

 

865

1,501

1,550

375

288

663

 

887

*At top of band

 


 

 

 

 

 


ISIN:

GB0002349065

Category Code:

MSCM

TIDM:

RE.

LEI Code:

213800YXL94R94RYG150

Sequence No.:

169467

EQS News ID:

1379401


 

End of Announcement

EQS News Service

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