KUALA LUMPUR – CGS-CIMB Securities has maintained its ‘neutral’ rating on the country’s agribusiness sector following Indonesia’s revised palm oil export levy effective today.
It said the change could be negative for Malaysian palm oil producers if the savings are partially passed on to consumers, resulting in lower international crude palm oil (CPO) price.
However, the stockbroking firm is marginally positive for Malaysian downstream CPO processors as the revised export levy narrows the advantage of Indonesian processors.
“Malaysia will remain competitive against Indonesia in exporting CPO under the new export levy regime as the ceiling export tax rate for Malaysia’s CPO of 8% is lower than Indonesia’s combined export tax and levy, ranging at around 7%-29% of reference CPO prices,” it said in a note today.
CGS-CIMB said the key changes from the implications of the new export levy structure is that the tariffs at which the export levy begins to rise have been raised to when the CPO price rises to more than US$750 (RM3,122) per tonne instead of US$670 per tonne, previously.
Additionally, the rate of levy increase is now US$20 per tonne increase for every US$50 per tonne rise for basic palm products like CPO compared to US$15 per tonne for every US$25 per tonne rise in CPO price previously.
“The new maximum export levy rate is US$175 per tonne against the previous structure of US$255 per tonne. This translates to savings of US$80 per tonne,” it said.
The Indonesian government last revised the export levy structure on palm oil exports on 10 December 2020. – Bernama, July 2, 2021
