KUALA LUMPUR – The Plantation Industries and Commodities Ministry has proposed cutting the export tax on palm oil by half in an effort to grow Malaysia’s market share as the world’s second-largest producer.
Minister Datuk Seri Zuraida Kamaruddin told Reuters the tax cut would be a temporary measure – “4%-6% from the current 8%” – and that the proposal has been submitted to the Finance Ministry.
The proposal includes expediting tax cuts for FGV Holdings Bhd and companies with overseas oleochemical production.
She added that the decision could be made as early as June.
This comes amid Ukraine’s disrupted sunflower oil supply and Indonesia banning palm oil exports, choking global edible oil stocks. Palm oil reportedly accounts for 60% of global vegetable oil shipments.
Zuraida was also quoted as saying that importing countries have requested Malaysia to reduce export taxes while India, Iran, and Bangladesh are proposing to barter rice, wheat, fruits, and potatoes for palm oil.
Malaysia is expected to go head-to-head with South Korea, one of the fastest-growing palm oil markets releasing its stockpiles, which could trigger a sharp price correction.
Her ministry projects palm oil production and export to rise by 30% by end-2022, which comes against the backdrop of Malaysia’s reopened borders.
The oil palm plantations in Malaysia have been facing acute labour shortage since the borders were closed at the start of the pandemic.
With the recent reopening, foreign workers are expected to arrive this month.
Zuraida will also be in the United States, with items on her agenda to include the import ban on FGV and Sime Darby Plantation Bhd issued by Customs and Border Protection over allegations of forced labour. – Bernama, May 11, 2022
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