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PETALING JAYA: Malaysia expects higher demand for crude palm oil from India as the country has increased the import tax on refined palm oil from Malaysia.
India, the world’s biggest importer of vegetable oil, said in a government statement on Wednesday that it raised the tax on Malaysian refined palm oil from 45 per cent to 50 per cent until March 2, 2020 to curb imports and boost local refining.
The country had imposed a 40 per cent import tax on crude palm oil (CPO) and 50 per cent on refined palm oil, but under an agreement with Malaysia, since January this year shipments of refined palm oil from Malaysia had been taxed at 45 per cent.
Malaysian Palm Oil Council chief executive officer Datuk Kalyana Sundram said India had imported substantial quantities of Malaysia’s refined palm oil in the last few months due to the lower tax — in the first half of 2019, the imports jumped 727 per cent from the same period a year before.
“Because of tax differentiation, we expect CPO will start finding its way into the India market now. We will see what the Indian importers will start doing,” he told reporters on the sidelines of the “Love My Palm Oil” carnival organised by MPOC in collaboration with Mydin Mohamed Holdings Bhd (Mydin).
The carnival was launched by Primary Industries Minister Teresa Kok Suh Sim. Also present was Mydin managing director Datuk Wira Ameer Ali Mydeen.
Kalyana noted that the increase in import duty would create a level playing field for Indonesian palm oil, which in the coming months is anticipated to eat into Malaysia’s refined palm oil market share.
However, he added there is still an opportunity for CPO as the commodity from Malaysia is still duty-free and would continue to be imported by Indian refiners. — Bernama
KUALA LUMPUR: Malaysian palm oil stockpiles are forecast to fall for a sixth straight month in August to the lowest in more than a year, as stronger exports outpace a slight rise in output, a Reuters survey showed.
Inventories in Malaysia, the world’s second-largest palm oil producer, are expected to fall 7.1% from the previous month to 2.22 million tonnes at end-August, the lowest since July 2018, according to a median estimate of seven planters, traders and analysts polled by Reuters.
A further inventory decline could support benchmark palm oil prices, which rose to a seven-month high last week. Prices have since eased, but was last up 0.3% at RM2,187 ($521.96) on Thursday evening.
The expected drawdown in stocks was due mainly strong gains in exports, which were seen rising 14.5% from July to 1.70 million tonnes in August. It would be the second consecutive month of gains, and the sharpest monthly rise since March, with poll respondents pointing to increasing demand from India and China.
India, the world’s largest edible oils importer has posted a strong jump in imports of refined palm oil from Malaysia this year following a change in Indian duties. On Wednesday it boosted the tax for six months.
China, another key edible oils buyer, has also been relying on palm as a soyoil substitute, as a trade war with the US has curbed soybean imports after Beijing imposed tariffs on American cargoes.
The survey pegged August output at 1.77 million tonnes, up 1.8% from the previous month, to the highest since December 2018, although three poll respondents forecast falling output.
“Production in many regions was down month-on-month during the first half of August, partly due to the dry weather,” said a manager at a plantations company, who declined to be named as he was not authorized to speak to the media.
“However, rains during the last 10 days of the month, especially in East Malaysia, after a relatively long dry spell have given a boost in production.”
Poll respondents added that output would rise from now until the year-end, estimating peak production to be around October to November this year. – Reuters