NEW DELHI: Malaysia is currently mapping out plans to make its palm oil sector more competitive but it would not mirror that of Indonesia’s strategies, which in reality, will result in huge losses for producers.
In Indonesia, export taxes are collected upfront from producers and Malaysia could not emulate this pratice as it would distort the market, says Malaysian Palm Oil Council chief executive officer Tan Sri Dr Yusof Basiron.
“We cannot copy the Indonesian system of charging upfront duties on Malaysian producers as it is not the right way to do business,” he said on a recent suggestion that Malaysia follow Indonesia’s tax system and structure.
He said the price of fresh fruit bunches (FFB) were calculated less 18% in terms of oil value.
“This enables refiners to produce palm oil at 18% cheaper than market rates as it is already discounted at the FFB level. The mill will then passes the oil to the refineries at another discount of 8%.”
But, some downstream industries only incurred minimal export duty, Yusof said, citing bio-diesel which attracted an export duty of only 2%.
And, not all processed palm oil was exported as some were consumed locally in manufactured goods or oleochemicals, said Yusof. – Bernama
Source : The Star
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