R.E.A. Holdings plc: Correction - Further re selling prices (1379401)

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.

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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 USD1,000 per tonne but have increased from a reference price of more than USD1,000 per tonne from the previous rules.

The CPO reference price is USD1,700 per tonne for June and is expected to be USD1,646 per tonne from July 2022 which, being above USD1,500 per tonne, will result in total export tariffs of USD663 per tonne. This represents an increase of USD88 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 USD200 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* 
USD              USD     USD    USD    USD       USD 
-              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

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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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June 20, 2022 06:59 ET (10:59 GMT)

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