Saturday , September 22 2018
Breaking News
Home / International Customs / Malaysia / Palm imports seen surging on Malaysia export tax cut
Palm imports seen surging on Malaysia export tax cut

Palm imports seen surging on Malaysia export tax cut

KUALA LUMPUR: Indian buyers will be among the biggest beneficiaries of Malaysia’s decision to suspend export duties on crude palm oil, with first quarter imports tipped to rise to the highest in more than two years. Shipments may rise by between 100,000 metric tons and 150,000 tons a month to as high as 850,000 tons in January and 950,000 tons in both February and March, said Sandeep Bajoria, chief executive officer of Sunvin Group, a Mumbai-based broker and consultant for the oilseeds industry. That could see first quarter purchases of as much as 2.75 million tons, the highest since the last quarter of 2015, according to data from the Solvent Extractors’ Association of India. The Jan 8 to April 7 tax freeze comes at an opportune time after India, the world’s biggest buyer of palm oil, increased import duties on vegetable oils in November. Overall purchases fell 11% year on year in November, the first drop in 10 months. Exports from Malaysia fared worse  slumping 24% from the year before. With the tax removal, India will be able to buy more palm oil,” Sunvin’s Bajoria said by phone. “The cold season in India will come to an end in January. At that time, the demand for palm oil will increase substantially,” he said. It will make Malaysian exports more competitively-priced, with soybean oil in India already about US$145 a ton more expensive than palm oil, he said. Exports by Malaysia’s Felda Global Ventures Holdings Bhd, the world’s top producer of crude palm oil, to major buyers such as India, Pakistan, China and Europe will rise by 30% to 50% thanks to the export tax suspension, the company said in a statement on its website. That would help Malaysia reduce domestic inventories and lift prices to average between 2,650 ringgit (US$661) a ton to 2,750 ringgit a ton in the first quarter, Group Chief Executive Officer Zakaria Arshad said in a statement on Tuesday. Palm oil, used in everything from cooking oil to lipstick, for March delivery on Bursa Malaysia Derivatives closed 1% higher at 2,622 ringgit a ton on Wednesday, taking this year’s gain to 4.8%.