Malaysia left the tax on crude palm oil exports unchanged for April as the world’s second-largest producer seeks to boost shipments and cut near record inventories. Futures in Kuala Lumpur rallied.
Shipments will be taxed at 4.5 percent next month, the same as this month, as the reference price was set at 2,383.84 ringgit ($765) a metric ton, within the minimum band for a levy to be applied, according to a Customs Department statement. The tariff was set at zero in January and February.
Malaysia said in October it would cut the export tax to between 4.5 percent and 8.5 percent from about 23 percent, to help trim record stockpiles and compete with Indonesia, the largest producer. Futures, which slumped to a three-year low of 2,217 ringgit on Dec. 13, have lost 29 percent in the past year because of falling demand.
“Stockpiles should ease even if it’s not because of exports, it could be because of production,’” said Arhnue Tan, an analyst at Alliance Investment Bank Bhd. in Kuala Lumpur. The tax is “quite neutral” for exports, she said.
Shipments from Malaysia were little changed at 675,210 tons in the first 15 days of this month from 673,555 tons in the same period in February, surveyor Intertek said today.
Exports fell 14 percent to 1.4 million tons in February for a fourth monthly drop and output shrank 19 percent to 1.3 million tons, while inventories declined to 2.44 million tons, the Malaysian Palm Oil Board said March 11. Reserves reached a record 2.63 million tons in December. Indonesia raised its export duty to 10.5 percent this month from 9 percent in February.
The contract for delivery in May climbed as much as 1.6 percent to 2,402 ringgit on the Malaysia Derivatives Exchange, before ending the morning session at 2,400 ringgit. Futures dropped 6.3 percent in February.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com
Source : Bloomberg