Suspension of CPO export tax timely – FGV Group CEO

KUCHING: The government’s decision to suspend crude palm oil (CPO) export tax for three months will benefit plantation companies with significant upstream operations while strengthening prices in the first quarter of the year.

Felda Global Ventures Holdings Berhad (FGV) group president and chief executive officer Dato’ Zakaria Arshad said industry players are faced with issues of high CPO stocks level and the strong ringgit that have pressured CPO price to hover around RM2,500 per metric tonne (MT).

“The government’s decision to suspend the implemention of the export tax is timely and an effective way to reduce CPO stock level that coincides with the increasing demand from China for the upcoming Chinese New Year.

“With this development, we expect a 30 to 50 per cent increase in the export volume to major importing countries like India, Pakistan, China and Europe.

“This shall also enable us to increase supply to our jointventure refinery in Pakistan at a more competitive pricing,” he was quoted as saying in a recent press statement.

According to Zakaria, FGV expects average CPO prices for the first quarter of the year to improve slightly to around RM2,650-RM2,750 per MT.

Touching on the overall performance last year, he said FGV’s core business operations had performed well with positive growth on Fresh Fruit Bunches (FFB) production compared to that in 2016.

He said FGV would remain committed to delivering the Strategic Plan 2020 (SP20) this year through better core business performance and stronger financial position as well as enhancing governance in all sectors that will deliver sustainable value to its shareholders.