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Malaysia to suspend export tax on palm oil for 3 months

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Staff Writer | January 5, 2018
Malaysia, the world's second-largest palm oil producer, will suspend export taxes on crude palm oil for a three-month period starting on Jan. 8 to boost prices and reduce high stockpiles.
palm oil
Asia   The second-largest palm oil producer
The export tax suspension will be lifted before the three-month period if crude palm oil stocks fall to 1.6 million tonnes, Malaysia's minister of plantation industries and commodities Mah Siew Keong said at a press conference.

"The implementation of this scheme is to reduce palm oil stocks and strengthen palm oil prices," said Mah, adding that he expected stocks to continue to increase in 2018.

"(The scheme) is one of the short-term pre-emptive measures by the government to manage the fall in crude palm oil prices, so that the smallholders' (small-scale farmers) incomes are not impacted and the country's oil palm industry continues to be competitive," he said.

Palm oil inventories in Malaysia, the second-biggest producer after Indonesia, had already risen to a near two-year high at end-November, squeezing benchmark prices to a 16-month low in mid-December.

Official data showed November stocks grew 16 percent to 2.56 million tonnes from October on weak exports.