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Date
 12/01/2021
News Provider
 Nur Aisha Abd Wahab
News Source
 The Star Online
Headline
 Malaysian crude palm oil exports becomes more competitive

The Star Online (12/01/2021) - KUALA LUMPUR: Indonesia, the world's biggest palm oil producer, will increase its refined palm oil exports after raising taxes, leaving Malaysia to become more competitive in crude palm oil (CPO) exports, a leading industry analyst said on Monday.

The reordering of palm oil trading follows Indonesia's decision last month to raise the export levy to a progressive system of US$55 to $255 per tonne of CPO, depending on price levels to generate funds for its palm-based biodiesel programme.


This gives Indonesian refiners a sizeable advantage over rival Malaysian refiners in the export market, even after Malaysia, the world's second-largest palm oil producer, raised its January CPO export tax to 8%, analyst James Fry said during a virtual industry conference.


"This is going to change the whole balance of exports between Malaysia and Indonesia," he said.


Fry is chairman of commodities consultancy LMC International and his comments are closely watched by the industry.


"We should now see a reordering of trade in palm products. Malaysia will be the key origin for CPO, Indonesia, thanks to tax incentives, will lead exports of processed products," Fry said.


He added that crude palm oil prices are expected to fall "later this year", which will erode Indonesia's competitive position.


"In the meantime, Malaysia will be at its most competitive in the CPO export market, while Indonesia will increase its share further for processed exports," he added


- Reuters


Read more at https://www.thestar.com.my/business/business-news/2021/01/12/malaysian-crude-palm-oil-exports-becomes-more-competitive



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