KUALA LUMPUR (Oct 20): Malaysia is considering a waiver of export tax on crude palm oil as a way to boost shipments and whittle down record-high inventories, Bloomberg reported.
Senior staff at the Ministry of Plantation and Commodities will meet with top industry executives on Tuesday to discuss temporarily lifting the levy, the financial newswire reported citing unidentified people familiar with the matter.
Palm oil inventory in the world’s second-largest producer ballooned to a record in September, even as sweltering heat from El Niño weather conditions threatens to cut yields.
Malaysia has a multi-tier tax rate of between 3.0% and 10% for exports of crude palm oil when prices per tonne exceed RM2,250, with the maximum rate kicking in above RM4,050. The duty rate was held at 10% for November based on the reference price of RM4,323.78.
If implemented, the waiver could help Malaysia regain some market share from Indonesia that last raised the combined export tax and levy tax on palm oil to US$308 per tonne for October.