Indonesia's Move On Palm Oil Duty Could Affect CPO Price, Says MPOC

KUALA LUMPUR, July 13 (Bernama) -- The restructuring of duty tax on palm oil in Indonesia could affect the price of crude palm oil (CPO), which is expected to range between RM3,000 and RM3,500 a tonne this year, says the Malaysian Palm Oil Council (MPOC). (US$1=RM3.19) Indonesia now levies an export tax of 19.5 per cent on CPO to encourage downstream activities in the country while Malaysia charges 30 per cent duty after a tax free limit of 3.6 million metric tonnes. "This could jeopordise any price rise in CPO," MPOC Chief Executive Officer, Dr Yusof Basiron told reporters after delivering a public lecture on "Palm Oil Industry Transformation: Techno-Ecological Economic Perspective", here on Friday. However, he said the production of CPO, which is not expected to see a significant increase this year, will continue to support the present level of prices and retain them at a stable level of RM3,000 to RM3,500 per tonne. "CPO price is still being sustained at the RM3,100 level due to a shortage of production in Malaysia," he said. Malaysia and Indonesia are the world's leading supplier of palm oil. June Statistics from the Malaysian Palm Oil Board (MPOB) this year showed a 4.85 per cent drop in the stocks of Malaysian palm oil to 1.70 million tonnes compared with stocks of 1.79 million tonnes in May. CPO stocks also dropped 19.73 per cent to 785,740 tonnes. Yusof said the current CPO price was also supported by Indonesia's production level which has not shot up steeply although its production this year is expected to go up. "A lower production of soy oil in the United States and Argentina has also kept the stability of CPO prices intact," he said. On another development, Yusof said MPOC will continue to intensify efforts to expand the market for Malaysian palm oil globally, including holding seminars on palm oil products. --BERNAMA