REA Holdings plc: Further sales prices | 27.09.24

REA Holdings plc (“REA” or the “company”)

Further sales prices and export rates

Further to the Company’s announcement on September 6, 2022 regarding the retail prices for Crude Palm Oil (“CPO”) and Crude Palm Kernel Oil (“CPKO”), and subsequent updates thereto published on the Company’s website at www.rea.co.uk/investors/cpo-export-tariffsthe Indonesian government has published a change in the structure of export duties that will take effect on September 22, 2024.

The export levy, as well as export duties, have been calculated on a sliding scale in recent years based on a reference price for crude palm oil that is periodically determined by the Indonesian government based on recognized benchmark prices for crude palm oil. The export tax must be paid to a special fund that uses the tax revenues to support measures designed to benefit oil palm cultivation in Indonesia. Export duties are taxes that must be paid to the Indonesian government.

The change just announced by the Indonesian government maintains the existing sliding scale of export duties with an upper and lower limit, but now imposes a fixed export tax of 7.5 percent on the crude palm oil reference price with no upper or lower limit, replacing the previous format of incremental charges. tax increases. The ministerial decision is expected to be reviewed after six months and the new export tariff structure will remain in force pending further announcement.

Below you will find the export tax and export duty rates after the last revision. The reference price for CPO for September is $839.53, resulting in total export rates of $115 per ton for CPO (net price of $765 per ton) and export rates of $148 per ton for CPKO. This represents a reduction in rates for both CPO and CPKO of approximately $27 per tonne compared to the regime in place before the review.

REA sells crude palm oil on the local Indonesian market, which is not subject to export taxes or duties. However, arbitrage between the Indonesian and international crude palm oil markets normally results in a local price that is broadly in line with prevailing international prices, after adjusting the latter for supply costs and export tariffs and restrictions. Changes in export tariffs and restrictions therefore have an indirect effect on the prices that REA achieves on the sale of its crude palm oil.

Export tariffs apply from September 22, 2024

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