MALAYSIA, the world’s second-biggest palm oil producer, could extend duty free exports until the end of this year if prices of the tropical oil remain at current levels, a leading palm oil producer told Reuters.
Malaysia has allowed duty free exports of crude palm oil for this month and next. A further extension in duty-free exports would help it reduce stockpiles but also put pressure on rival top producer Indonesia to consider similar measures.
Indonesia has allowed duty free exports for October in response to the Malaysian duty structure.
“If prices remain at the current level, then Malaysia could allow duty free exports in November and December,” said Felda Global Ventures Holdings Bhd (FGV) chief executive officer Mohd Emir Mavani Abdullah.
Both Malaysia and Indonesia set export taxes on a monthly basis. In August, Malaysia’s export duty for crude palm oil was five per cent, while Indonesia has set its September rate at nine per cent compared with 10.5 per cent in August.
Malaysian palm oil futures settled at RM2,177 per tonne last Friday, after hitting a 5½-year low at RM1,914 on September 2.
Palm oil has fallen a quarter since its March peak of RM2,916. The duty free exports have been helping in bringing down stockpiles in Malaysia, Mohd Emir said.
FGV is planning to enter India, the world’s biggest importer of palm oil, by setting up a port-based refinery with a local partner, said Mohd Emir, who was in Mumbai for a Globoil India conference. “We are examining a couple of proposals now.”
India’s palm oil imports in the 2014/15 marketing year starting in November are forecast to surge to nine million tonnes, compared with 2.6 million tonnes in 2005/06.
