Export duty exemption to be reimplemented to stabilise CPO prices
KUALALUMPUR: ThePlantation Industries and Commodities Ministry is reimplementing the export duty exemption scheme on Crude Palm Oil (CPO) exports for a three-month period from Jan 8 to reduce palm oil stocks and strengthen the commodity prices.
Its minister, Datuk Seri Mah Siew Keong said this was aimed at arresting the drop in CPO prices which had shown a significant downward trend since October 2017.
“In the third week of December 2017, the CPO average price dropped to RM2,372.50.
“Palm oil stocks in November 2017 rose 16 per cent to 2.56 million tonnes due to increased production and declining exports,” he told the media to announce the commodity trading performance for the first 11 months of 2017, here yesterday.
Mah said the stocks were expected to continue to increase this year and the scheme was the government’s short-term pre- emptive measure to address falling crude palm oil prices so that smallholders’ earnings would not be affected and the palm industry would continue to be competitive.
“Export duty exemptions will be discontinued earlier than three months if palm oil stocks were to drop to 1.6 million tonnes, which is the appropriate and sufficient stock level to stabilise prices and meet palm oil refinery needs,” he said, adding that the scheme is open to all companies with valid licence to export CPO.
He said the ministry would continue to monitor the market price trend and palm oil stocks and would continue to implement appropriate measures to strengthen palm oil prices.
Mah expressed confidence that the scheme would help increase CPO exports for the benefit of 650,000 smallholders.
“Both MPOB ( Malaysian Palm Oil Board) and MPOC ( Malaysian Palm Oil Council) are conducting a series of roadshows to countries that have bigger (export) potential, namely China, India and European countries.
“On top of this, they are also expanding the marketing activities into Iran, Vietnam, and we now have an office in West Africa. So, we hope these new markets would increase our oil palm demand,” he said. On the strengthening of the ringgit, Mah said it would likely reduce revenue from the commodity by about 10 per cent, but the loss would likely be capped with the introduction of the scheme. — Bernama