KUALA LUMPUR, June 30 — The Indian government’s decision to reduce its import duty on crude palm oil (CPO) from 15 per cent to 10 per cent is a boon for the Malaysian palm oil industry, giving immediate relief to the smallholders, said the Malaysian Palm Oil Board (MPOB).
Director-general Ahmad Parveez Ghulam Kadir said with the CPO price level stabilising between RM3,500 and RM3,800 per tonne, CPO export to the world’s largest palm oil consumer is bound to increase further in the near future.
Based on the industrial regulator’s data, Malaysia’s palm oil export to India increased by more than eight folds to 1.29 million tonnes from January until May 2021, from 0.15 million tonnes recorded during the same period in 2020.
Yesterday, India’s Ministry of Finance announced that the new tax rate will be effective from June 30 to Sept 30, 2021.
In a statement today, the Indian Vegetable Oil Producers’ Association (IVPA) said the effective import duty on CPO — which includes an agriculture development cess and a surcharge — has now come down to 30.25 per cent from 35.75 per cent.
“With regards to refined palm olein (RPO), Malaysia will not gain much as the import restriction on RPO instituted since Jan 8, 2020 is still in place,” Ahmad Parveez told Bernama, adding that India has also reduced its RPO import duty to 37.5 per cent from 45 per cent previously.
Nevertheless, he cautioned that stiff competition is expected to come from Indonesia, which will also benefit from the import duty reduction.
“Furthermore, Indonesia also announced its plan to reduce CPO export levies to US$175 (RM730) per tonne from the current US$255 per tonne when the CPO price exceeds US$1,000 per tonne,” he said.
Meanwhile, Singapore-based Palm Oil Analytics’ owner and co-founder Sathia Varqa said Malaysia’s market share of CPO imports to India is set to accelerate this year after January-May 2021 exports rose by twelvefold to 1.16 million tonnes versus the corresponding period last year.
He also noted that Indonesia’s CPO export to India fell 32 per cent to 999,304 tonnes.
“Malaysia has been the main CPO exporter to India this year, overtaking Indonesia, and is poised to benefit from the lower import tax,” he added.
According to cargo surveyor Intertek Testing Services’ data, Malaysia’s exports for the June 1-30 period rose by 7.07 per cent to 1.52 million tonnes from 1.42 million tonnes recorded from May 1-30.
Another cargo surveyor, Amspec Malaysia, stated that exports in the June 1-30 period rose 8.62 per cent to 1.55 million tonnes from 1.42 million tonnes in May. — Bernama