21/09/2024 (New Straits Times), Kuala Lumpur - Public Investment Bank Bhd (PublicInvest Research) has kept a "neutral" call on the plantation sector with a full-year crude palm oil (CPO) forecast of RM3,800 per tonne.

The research firm said that although Indonesia's new levy and the hike in India's import taxes on edible oils may have an impact on Malaysia's palm oil exports in the coming months, some Malaysian planters may see improved CPO prices from their Indonesian upstream business.

IOI Corporation Bhd, Kuala Lumpur-Kepong Bhd, and SD Guthrie Bhd are the notable Malaysian players that have exposure to the downstream business, it said in a note.

Indonesia's Finance Ministry announced that the country is cutting its export levy on palm oil in a bid to boost local shipments ahead of the peak production season.

The world's biggest palm oil producer set the CPO levy at 7.5 per cent of the reference price, which will see the duty cut from US$90 to US$63 for September.

Meanwhile, the levy for processed palm products will be between 3.0 per cent and 6.0 per cent.

India on the other hand, imposed a 20 per cent basic custom duty on CPO, crude soyoil, and crude sunflower oil from September 14 in a move to support "remunerative prices" for local oil and oilseed farmers ahead of the regional elections due in Maharashtra later this year.

India will effectively raise the total import duty on the three major oils to 27.5 per cent from 5.5 per cent as they are also subject to the nation's Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.

Public Invest Research said Malaysia could potentially lose a slight market share to their Indonesian counterparts, while demand for palm oil products from India could be softer, as it believes they would have stocked up ahead of the announcement.

"It will be more challenging for the local refiners, who have been struggling in the past. India is Malaysia's second largest palm oil importer, accounting for 22 per cent of total imports this year," it said.

https://www.nst.com.my/business/corporate/2024/09/1108507/neutral-call-kept-plantation-sector