KUALA LUMPUR: Malaysia will allow duty-free exports of crude palm oil (CPO) for three months starting next Monday, 8th Jan 2018, in the hope of supporting prices.
Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong announced the government would allow CPO exports to be duty-free starting 8th January 2018 to 7th April 2018, to clear stocks in the country.
Various news and analysts reports have stated Malaysia's latest palm oil stocks has risen as high as 2.56 million tonnes while exports remained at a not-so-robust two million tonnes.
"Palm oil prices have plunged drastically since October 2017. So, today's announcement is one of the short-term pre-emptive measures by the government to manage low CPO prices," the minister said in a media briefing here today.
He explained the government is concerned about the interests of more than 650,000 smallholders, oil palm millers and refiners throughout the sprawling palm oil value chain.
"These stakeholders' income are highly dependent on palm oil prices."
"We hope, by allowing duty-free CPO exports, for the immediate term, there'll be remunerative returns for all stakeholders throughout the palm oil value chain," Mah added.
He, however, cautioned the CPO exports duty-free status would revert to being taxed within the three-month period, if CPO stocks settles to or dips below 1.6 million tonnes.
At 6.30pm, the third month benchmark palm oil futures on the Bursa Malaysia Derivatives Exchange added RM5 to close at RM2,590 per tonne.
Commenting on commodity trading performance, Mah said the sector remains the biggest net exporter with trade balance of RM92.9 billion as compared to other sectors, such as electrical and electronics (RM28.8 billion), petroleum and gas (RM32 billion), for the period of January to November last year.
"For the same period, commodity exports amounted to RM129.1 billion, 16.5 per cent more than RM110.8 billion recorded in January to November 2016.
"Imports of commodities from January to November 2017 was RM36.2 billion, 26.4 per cent higher than RM28.6 billion recorded for the same period 2016.
"Commodity crop imports accounted for 4.7 per cent of total imported goods," he said.
Mah said his ministry will continue to monitor exports and stocks to ensure the whole palm oil value chain remains competitive.