KUALA LUMPUR: Malaysia will raise the export duty rate on CPO exports to 5% from April 1 from the 0% rate effective since January, according to a circular posted by the Royal Malaysian Customs Department on the Malaysian Palm Oil Board or MPOB website on Thursday.
The Malaysian government reduced CPO export duties from 6% in December to 0% in a bid to lower the export price of Malaysian CPO and spur exports as Malaysian stocks of palm oil had built up to unsustainable levels on weak export demand in late 2017.
As production in Malaysia increased in the later part of 2017 as palm trees recovered from the stress of the El Nino-induced drought, Malaysian December palm oil inventories shot up to 2.73 million mt from 2.55 million mt in November, according to MPOB data.
Meanwhile, CPO exports from Malaysia during November and December were 1.36 million mt and 1.43 million mt respectively, down from 1.54 million mt in October.
In those circumstances, the Malaysian government introduced 0% export duties. But the government said it would end the zero rate by the end of March.
Analysts have said the move was effective in reducing Malaysian stocks, which were reported at 2.48 million mt at the end of February according to the MPOB.
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