Malaysia plans to review export duty on palm oil


The Malaysian government plans to revise its export duty structure for palm oil in consultation with Indonesia after a marked drop in demand due to higher prices in the last few months.

Seri Mah Siew Keong, Minister of Malaysian Plantation Industries and Commodities, said the issue of export duty was raised by Indian importers and would be reviewed at the next Council of Palm Oil Producer Countries, which includes Indonesia.

The largest palm oil producing countries — Malaysia and Indonesia — have kept export duty on refined palm oil lower than crude palm oil to support domestic refiners. In fact, he said other palm producing countries, such as Thailand and Colombia, have shown interest in joining the Council.

The country expects a rebound in palm production to 19.4 million tonnes (mt) this year from last year’s 17.32 mt. Exports were down at 16 mt last year against 17.4 mt in 2015.

India is the largest importer of palm oil from Malaysia followed by the European Union and China. India imported 21 mt of vegetable oil last year. Of this 8.5 mt was palm oil and shipments from Malaysia accounted for about 40 per cent or 3 mt, said Atul Chaturvedi, President, Solvent Extractors’ Association of India.

The Malaysian government plans to set up an office in Mumbai by June to work with nutrition institutes in India to conduct research and spread awareness about the health benefits of palm oil.

A Kushairi Din, Director-General, Malaysian Palm Oil Board, said the price of palm oil has touched 3,200 ringgit a tonne and is expected to remain firm this year due to a fall in production of other competing oils.

India’s vegetable oil imports is expected to come down by 1.5 mt this year to 14 mt as the kharif oilseed output was much better, said Chaturvedi.


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