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R.E.A. Holdings plc Further re update on selling prices

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

Further re update on selling prices

Further to the company's announcement in December 2020 regarding the impact of Indonesian export duty and export levy at different reference prices on selling prices for CPO and CPKO, the Indonesian government has published a change to the structure of  export levy and duty with effect from 1 July 2021. 

Export duty is a tax payable to the Indonesian government and export levy is payable to a dedicated fund that utilises levy income to subsidise the manufacture of biodiesel from CPO and to support other measures designed to benefit the growing of oil palms in Indonesia.  Both export duty and export levy are calculated on sliding scales (as shown in the table below) 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 CPO reference price is expected to be revised to $1,094 per tonne in July.

REA generally sells CPO in the Indonesian local market which is not subject to export duty or export levy.  However, arbitrage between the Indonesian local 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 duty and levy.