20/01/2026 (The Edge Malaysia), Kuala Lumpur - TA Securities said Malaysia’s palm oil exporters could make inroads in price-sensitive markets like India from March 1 when Indonesia’s planned export levies come into force.

It said in a note on Tuesday (Jan 20) that Indonesia’s plan to raise its export levy from 10% to 12.5% could reduce its global competitiveness and provide Malaysian exporters with a major cost advantage.

The firm said Malaysia’s lower export duty gives producers around US$103/tonne (RM417.41/tonne) in savings, making their palm oil cheaper and allowing better flexibility in pricing.

TA Securities said, assuming the same reference price and export duty for March 2026, the Indonesian government could collect an additional US$22.9/tonne in export taxes under the new rate. In comparison, assuming Malaysia maintains the same reference price and export duty rate as February, the export tax in March is expected to decline by US$7/tonne relative to January.

TA Securities said Malaysian exporters are better positioned to capture market share, particularly in price-sensitive regions like India, whereas Indonesian exporters face a trade-off between higher levy contributions, which are primarily used to fund domestic biodiesel subsidies, and sustaining international competitiveness.

It said the delay in Indonesia’s B50 biodiesel mandate is not surprising, as it faces structural challenges rather than timing issues.

Key hurdles include stabilising its Palm Oil Plantation Fund (BPDP), narrowing the cost gap between biodiesel and fossil diesel, expanding infrastructure and improving quality and operational readiness.

Concerns are growing over whether subsidy funding is sufficient, as the price gap between biodiesel and fossil diesel widens and a fiscal deficit is reported for 2024. Media estimates suggest about 51 trillion rupiah (RM12 billion) in subsidies will be needed in 2025, but the BPDP fund balance has not been disclosed, adding uncertainty over the timing and sustainability of the B50 rollout.

https://theedgemalaysia.com/node/789893