REA palm oil price gains limited by Indonesian charges
REA Holdings shares fell after the company said gains from the rising price of palm oil would be limited by charges imposed by the Indonesian government.
The palm oil producer said the price of palm oil had jumped to $920 a tonne from $510 a tonne in May. REA said the increase was "materially beneficial" to it but that two charges on exports would reduce the benefit.
The Indonesian government has made changes to its export levy, used to subsidise biodiesel production, following price rises. At the current reference price of $870.77 per tonne, the net price would be $682 per tonne, REA said. Though REA generally sells its palm oil within Indonesia the local price is usually broadly in line with international prices, it said.
REA shares fell more than 12% after its update and were down 8.9% to 61.50p at 13:17 GMT.
The company also said it extended its $5m working capital facility with Indonesian banks and that it was in talks to add to term loan facilities to partly fund "nearer term repayments due in respect of those facilities". A tribunal has dismissed claims against REA and PT Indo Pancadasa Agrotama related to the development of that company's coal concession, REA added.