Home > Uncategorized > Another month of zero tax on CPO exports

Another month of zero tax on CPO exports

This is written by my colleague Sharen Kaur.

KUALA LUMPUR: THE government will maintain the current zero export tax on crude palm oil (CPO) for February as the base price is still below RM2,250 a tonne, says Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.

“There will be another month of tax-free CPO if the price does not reach RM2,250 a tonne,” he told reporters here yesterday, after officiating at the opening the Palm Oil Review and Outlook Seminar 2013.

Effective January 1 2013, the export taxes on CPO are between 4.5 per cent and 8.5 per cent, down from the previous average of 23 per cent. It is being fixed on a monthly basis. 

The new tax structure is meant to facilitate refiners market cooking oil, oleochemicals, specialty fats and biodiesel at competitive prices to the global marketplace. 

On news that Indonesia, the world’s largest palm oil producer, was considering reducing export taxes too, Dompok said it was a positive strategy for the industry.

“Malaysia and Indonesia are the two biggest producers of palm oil and any move by them will have an impact on the economy and CPO prices. We will continue to engage with our counterparts in Indonesia on this.

“During a meeting in Thailand, we both agreed that there are a lot of good things that can be done through cooperation on supply management and price stabilisation,” he said.

Meanwhile, Dompok said the government is upbeat that implementation of the 10 per cent palm biodiesel blending (B10 programme) for the non-subsidised sector will help ease the current record high palm oil stock.

Last week, the Malaysian Palm Oil Board reported that the December 2012 palm oil stock had increased 2.41 per cent to 2.63 million tonnes from November.

“We expect the full implementation of the B10 programme by the end of this year. This will help ease the palm oil stock to a more comfortable level of below two million tonnes. 

“The government has spent over RM50 million to set up blending facilities and most of them would be operational by the end of this year. We expect about one million tonnes of CPO to be taken off the market,” Dompok said.

The minister is bullish on growth in the palm oil industry in the current year, citing improvements in the global economy. “I think the industry can only improve. Malaysia has more than 160 food items using palm oil. We can do better,” Dompok said.

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