PUTRAJAYA: Malaysia would “perhaps” maintain the zero export duty for crude palm oil (CPO) for the third consecutive month, said Plantation, Industries and Commodities Minister Tan Sri Bernard Dompok.
He said the duty free export of CPO would “perhaps” be continued if the CPO price stayed below the treshold of RM2,250 per tonne.
Malaysia, the world’s second-largest palm producer, has maintained zero export duty for two consecutive months, with the tax fixed on a monthly basis to compete with Indonesia.
In February, Indonesia increased its palm oil export duty to 9% from 7.5% in January.
Dompok, who said CPO export was likely to improve this year despite the challenges faced by the industry, noted that the Government was aware of the country’s high stockpile, which hit a record high of 2.63 million tonnes at end-December 2012.
Speaking at the Reach and Remind Friends of The Industry Seminar and Dialogue, he added that the Government had a number of measures to mitigate the matter.
Dompok expects the country’s biodiesel programme, fully subsidised by the Government, to be fully developed by mid-2014. Last month, Dompok said the Government had spent up to RM30mil on blending facilities for the programme.
“The downstream sectors are set to benefit from these measures, in particular the refining sector,” he said.
Dompok added that the Government would continue to assist the industry to remove the obstacles faced in penetrating new markets while making the industry more competitive.
Malaysian Palm Oil Council chairman Datuk Lee Yeow Chor said there were plenty of space for the industry to grow, adding that the Government was looking at emerging countries such as Myanmar, Iran and Vietnam for new markets.
According to Macquarie Securities Group analyst Sunaina Dhanuka, India would be the key driver of an increase in demand for palm oil.
“We expect demand to rise this year but it is difficult to see CPO price to increase due to high inventories,” she said in her presentation.
Source : The Star
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