MARKET DEVELOPMENT
BUDGET: Market Traders Applaud New Measures For Commodity Sector
BUDGET: Market Traders Applaud New Measures For Commodity Sector
11/10/2014 (Bernama) - Market traders have welcomed the 2015 Budget and expressed confidence it would help to invigorate the economy.
The commodity sector is particularly pleased with a further extension of the export duty exemption for crude palm oil (CPO) until December 2014 and incentives for new planting and replanting of RM41 million for oil palm smallholders.
Phillip Futures Sdn Bhd derivative products specialist David Ng said the Budget spelt out concrete measures, with increased emphasis on replanting activities needed to raise productivity.
"Replanting is one of the important aspects the government covers sufficiently. We view the move as positive for the sector," he told Bernama.
On the introduction of zero export tax till December, Ng said it will help to induce demand given the current high stockpile situation in the country.
According to the Malaysian Palm Oil Board (MPOB), total palm oil stocks increased by 1.79 per cent to 2.090 million tonnes in September against 2.053 million tonnes in August.
"We view the government's effort as positive to the plantation industry as the duty free export will provide some support for prices and will ease industry concern especially as the current low price environment is already affecting plantation margins," said Ng.
But the government's extension of export duty exemption could also put pressure on rival top producer Indonesia to consider similar measures, he noted.
Another trader, Interband Group of Companies Senior Palm Oil Trader Jim Teh, said the zero export tax will lower export prices and thus encourage importers especially India and China.
"I believe the exemption will definitely drive our exports and this was what the government wanted too," said Teh.
On the incentives for new planting and replanting, he said: "If you look at the history of oil palm, every 20 years it has to be replanted. So I think on a yearly basis the amount is adequate."
The commodity sector is particularly pleased with a further extension of the export duty exemption for crude palm oil (CPO) until December 2014 and incentives for new planting and replanting of RM41 million for oil palm smallholders.
Phillip Futures Sdn Bhd derivative products specialist David Ng said the Budget spelt out concrete measures, with increased emphasis on replanting activities needed to raise productivity.
"Replanting is one of the important aspects the government covers sufficiently. We view the move as positive for the sector," he told Bernama.
On the introduction of zero export tax till December, Ng said it will help to induce demand given the current high stockpile situation in the country.
According to the Malaysian Palm Oil Board (MPOB), total palm oil stocks increased by 1.79 per cent to 2.090 million tonnes in September against 2.053 million tonnes in August.
"We view the government's effort as positive to the plantation industry as the duty free export will provide some support for prices and will ease industry concern especially as the current low price environment is already affecting plantation margins," said Ng.
But the government's extension of export duty exemption could also put pressure on rival top producer Indonesia to consider similar measures, he noted.
Another trader, Interband Group of Companies Senior Palm Oil Trader Jim Teh, said the zero export tax will lower export prices and thus encourage importers especially India and China.
"I believe the exemption will definitely drive our exports and this was what the government wanted too," said Teh.
On the incentives for new planting and replanting, he said: "If you look at the history of oil palm, every 20 years it has to be replanted. So I think on a yearly basis the amount is adequate."