Malaysia keeps palm export tax unchaged
Malaysia left the tax on crude palm oil exports unchanged for April as the world’s second-largest producer seeks to boost shipments and cut near record inventories. Futures in Kuala Lumpur rallied.
Shipments will be taxed at 4.5 per cent next month, the same as this month, as the reference price was set at RM2,383.84 a metric tonne, within the minimum band for a levy to be applied, according to a Customs Department statement. The tariff was set at zero in January and February.
Malaysia said in October it would cut the export tax to between 4.5 per cent and 8.5 per cent from about 23 per cent, to help trim record stockpiles and compete with Indonesia, the largest producer.
Futures, which slumped to a three-year low of RM2,217 on December 13, have lost 29 per cent in the past year because of falling demand.
"Stockpiles should ease even if it’s not because of exports, it could be because of production," said Arhnue Tan, an analyst at Alliance Investment Bank Bhd in Kuala Lumpur. The tax is "quite neutral" for exports, she said.
Shipments from Malaysia were little changed at 675,210 tonnes in the first 15 days of this month from 673,555 tonnes in the same period in February, surveyor Intertek said today.
Exports fell 14 per cent to 1.4 million tonnes in February for a fourth monthly drop and output shrank 19 per cent to 1.3 million tonnes, while inventories declined to 2.44 million tonnes, the Malaysian Palm Oil Board said March 11. Reserves reached a record 2.63 million tonnes in December. Indonesia raised its export duty to 10.5 per cent this month from 9 per cent in February.
The contract for delivery in May climbed as much as 1.6 per cent to RM2,402 on the Malaysia Derivatives Exchange, before ending the morning session at RM2,400. Futures dropped 6.3 per cent in February.-- Bloomberg