Malaysia Looks At Constructive Ways To Assist Palm Oil Downstream Players

KUALA LUMPUR, March 7 (Bernama) -- Malaysia is looking at constructive ways to assist palm oil downstream players counter Indonesia's new lower tax structure, which has affected 40 per cent of local smallholders. Malaysian Plantation Industries and Commodities Minister Bernard Dompok said Indonesia is undergoing an industrialisation phase of its palm oil industry, therefore, lowering the palm oil export duty would benefit the country. "What we are looking at is how the local industry can receive assistance while undergoing this phase without hurting smallholders, and the plantation sector at large. "We will try to accelerate the downstream sector to be much more competitive," he told reporters after delivering the keynote address at the Palm & Lauric Oils Conference 2012 here Tuesday. However, against this backdrop, the world's largest palm oil producer's export duty cut will affect the export competitiveness of Malaysia's refined industry. Indonesia has slashed the maximum export duty on refined, bleached and deodorized palm olein in bulk to seven per cent from 15 per cent, while the export duty on crude palm oil (CPO) is unchanged at 15 per cent. The local CPO export tax structure has remained unchanged at 23 per cent since the 1970s. Among moves taken by Malaysia in this regard is the government issuing a duty free CPO export quota of three million tonnes for plantation firms with overseas refineries last year. Dompok said both Malaysia and Indonesia are still in talks to address the issue. Market analysts have also been reported as saying that exports of Malaysian CPO are losing ground in their traditional markets, to shipments from Indonesia. This is evident from the weak export data reported by cargo surveyors for February. Cargo surveyor Societe Generale de Surveillance reported that exports of Malaysian palm oil products for Feb 1-15 fell 14.2 per cent to 494,298 tonnes from the 575,833 tonnes shipped during the same period in January. Meanwhile, Intertek Testing Services said the country's palm oil products export for the first 15 days in February declined 14 per cent to 509,107 tonnes from 591,995 tonnes in the same period previously. -- BERNAMA