The new rule, effective from Sept 21, will cut the duty to US$63 per ton from US$90 for September.

The levy for processed palm products will be between 3% and 6%.

The changes will help the Southeast Asian nation to become more competitive than neighbouring Malaysia, the second-largest producer.

That could add further pressure on benchmark palm oil futures, which have fallen more than 10% in Kuala Lumpur since a high in April.

Indonesia collects an export tax and an additional levy on palm exports.

The levy, which is utilised to fund replanting programmes and provide biodiesel subsidies, was previously set every month in US dollars.

The reference rate – a weighted average based on palm oil prices – is set every month by the trade ministry to calculate export duties.