The Star Online (10/01/2018) - PETALING JAYA: Felda Global Ventures Holdings Bhd image: https://cdn.thestar.com.my/Themes/img/chart.png (FGV) expects its export volume to increase significantly as a result of a temporary export tax suspension by the Government.

In a statement, the biggest plantation company in the country said the export tax suspension is also expected to lift crude palm oil (CPO) prices.

According to FGV, its export volume to major importing countries such as India, Pakistan, China and Europe would likely increase by around 30%-50% because of the initiative.

It said the Government’s decision to suspend the export tax for three months is expected to benefit plantation companies with significant upstream operations and strengthen commodity prices for the first quarter of this year.

Group president and CEO Datuk Zakaria Arshad pointed out that the move provided relief to industry players who have been faced with issues of high CPO stock levels and the strengthening of the ringgit that put pressure on the CPO price to around RM2,500 per tonne.

“The Government’s action to implement the export tax suspension is timely and an effective way to reduce the CPO stock level that coincides with the increasing demand from China for the upcoming Chinese New Year,” Zakaria said.

“With this development, we expect a 30%-50% increase in the export volume to major importing countries like India, Pakistan, China and Europe. This shall also enable us to increase supply to our joint-venture refinery in Pakistan at a more competitive pricing,” he added.

Zakaria said, based on this situation, the average CPO price for the first quarter of 2018 is expected to improve slightly to around RM2,650 to RM2,750 per tonne.