MARKET DEVELOPMENT
Malaysian Palm Oil Refiners Call For Removal of Export Duty
Malaysian Palm Oil Refiners Call For Removal of Export Duty
04/03/2016 (Reuters) - Malaysia should scrapexport duty rates for processed palm oil products to help itsrefining sector, which is losing market share to the world'sbiggest palm producer Indonesia, a Malaysian industry body said.
Malaysia's exports of refined, bleached, deodorised (RBD)palm kernel oil have fallen 26 percent in the past four years,D. Chandramohan, chairman of the Palm Oil Refiners AssociationOf Malaysia (PORAM), told Reuters.
"Removing its 5 percent export duty to zero duty wouldimprove our export competitiveness," he said. RBD is the onlyMalaysian processed oil product that still attracts a duty.
Refiners in Malaysia, the world's second-largest palm oilproducer, say Indonesian rivals enjoy a price advantage as thecountry imposes a higher export levy on crude palm oil (CPO)than on refined palm products. This encourages CPO producers tosell to domestic refiners, keeping down their costs.
PORAM called last year for a common crude palm oil exportduty plan with Indonesia, to help Malaysian refiners boostdownstream margins and improve market share.
Malaysian shipments of palm oil products have fallen forfive consecutive months since October, according to data fromcargo surveyors.
Exports in February fell by 17-18 percent from a month ago,as consumer demand for the tropical oil from top consumers Chinaand India waned. Palm oil is also losing market share to soyoilon a narrowing spread between the two oils, and as China favoursimporting cheaper soybeans to crush for domestic use.
Palm oil refiners face a further hurdle if proposals toimpose import taxes on palm oil and its related products areimplemented in France and Russia.
France's proposals would see an import tax on palm oil andpalm kernel oil of 300 euros ($326) per tonne in 2017, rising to900 euros per tonne by 2020. Russia's excise tax on palm oilcould be introduced on July 1 and amount to around $200 pertonne.
"If these two countries do it and we don't oppose it, othercountries may follow suit. The basis for this isdiscriminatory," said Chandramohan.
($1 = 0.9203 euros)
Malaysia's exports of refined, bleached, deodorised (RBD)palm kernel oil have fallen 26 percent in the past four years,D. Chandramohan, chairman of the Palm Oil Refiners AssociationOf Malaysia (PORAM), told Reuters.
"Removing its 5 percent export duty to zero duty wouldimprove our export competitiveness," he said. RBD is the onlyMalaysian processed oil product that still attracts a duty.
Refiners in Malaysia, the world's second-largest palm oilproducer, say Indonesian rivals enjoy a price advantage as thecountry imposes a higher export levy on crude palm oil (CPO)than on refined palm products. This encourages CPO producers tosell to domestic refiners, keeping down their costs.
PORAM called last year for a common crude palm oil exportduty plan with Indonesia, to help Malaysian refiners boostdownstream margins and improve market share.
Malaysian shipments of palm oil products have fallen forfive consecutive months since October, according to data fromcargo surveyors.
Exports in February fell by 17-18 percent from a month ago,as consumer demand for the tropical oil from top consumers Chinaand India waned. Palm oil is also losing market share to soyoilon a narrowing spread between the two oils, and as China favoursimporting cheaper soybeans to crush for domestic use.
Palm oil refiners face a further hurdle if proposals toimpose import taxes on palm oil and its related products areimplemented in France and Russia.
France's proposals would see an import tax on palm oil andpalm kernel oil of 300 euros ($326) per tonne in 2017, rising to900 euros per tonne by 2020. Russia's excise tax on palm oilcould be introduced on July 1 and amount to around $200 pertonne.
"If these two countries do it and we don't oppose it, othercountries may follow suit. The basis for this isdiscriminatory," said Chandramohan.
($1 = 0.9203 euros)