Posted on 13 Feb 2015
"After studying various scenarios ... the government has decided that the export tax regime will continue from March," Plantation Industries and Commodities Minister Datuk Seri Douglas Uggah Embas told reporters.
Uggah said the tax rate would depend on palm oil prices, adding that the government would announce details on the tax policy on Feb 16.
Malaysia, the world's second-largest producer of crude palm oil (CPO) after Indonesia, exempted CPO exports from taxes from October to December, later extending the policy to the end of February.
Increased supply and slack global demand have pressured palm oil prices which dropped 15% last year.
The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange was little changed at RM2,283 ringgit per tonne by the midday break yesterday, well above a six-week low of RM2,106 hit in January.
Malaysia usually calculates its crude palm oil tax with average monthly prices provided by the industry regulator, the Malaysian Palm Oil Board, where a monthly average above RM2,250 will trigger tax rates that start from 4.5%. But the government makes the final decision.
Uggah said combined crude palm oil output from Malaysia and Indonesia is expected to rise to 51.1 million tonnes in 2015
from 49.2 million tonnes last year.
Uggah said the decline in palm oil prices was also due to higher production of competing vegetable oils, including soybean oil.
