Malaysia, the world’s second-largest palm producer, increased the tax on exports of crude oil after prices climbed to the highest level since 2012.
Cargoes will be taxed at 5.5 percent in April from 5 percent this month, according to a customs statement on the website of the Malaysian Palm Oil Board. The reference price for calculating the tariff was set at 2,598.76 ringgit ($795) a metric ton, it said. Indonesia, the top supplier, kept its tax unchanged at 10.5 percent for March from February.
Futures advanced 16 percent in the past year and reached 2,916 ringgit on March 11, the highest level since September 2012. Reserves in Malaysia fell 14 percent to 1.66 million tons in February from a month earlier, while production slumped 15 percent to 1.28 million tons, the lowest since April 2012, data from the palm oil board showed. Exports lost 1.3 percent to 1.35 million tons, the lowest since July 2012.
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“This is to be expected as CPO prices have been going up in the last month or so,” Ivy Ng, an analyst with CIMB Investment Bank Bhd., said in Kuala Lumpur. “Typically in a tight supply condition, exporters can try and pass on the export tax to the consumer. This could affect demand slightly. At this juncture, because the increase is 0.5%, it should not be significant, so it should be absorbed.”
Shipments fell 21 percent to 480,730 tons in the first half of this month from the same period in February, surveyor Intertek said March 15. The contract for delivery in June increased 0.7 percent to 2,760 ringgit by the midday break on the Bursa Malaysia Derivatives in Kuala Lumpur.
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Source : Bloomberg