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KUALA LUMPUR, Sept 4 Malaysia will exempt crude
palm oil from export taxes in September and October to reduce
stockpiles of the tropical oil after prices fell to five-year
The exemption from duties, which had been set at 4.5 percent
for September, is expected to increase palm oil exports by
600,000 tonnes over the two months and reduce stock levels to
1.6 million tonnes by the end of the year, the commodities
ministry said in a statement.
"The industry requested we extend this to December. We'll
assess this as we go along," Douglas Uggah Embas, Malaysia's
commodities minister, told a news conference.
He also said the cabinet would decide this month whether to
bring forward to Dec. 1 plans to impose a requirement for
biodiesel to use 7 percent palm oil, from 5 percent now. Its
previous commitment had been to introduce the new blend by the
first quarter of 2015.
Malaysian palm prices, which set the tone for
global prices, plunged 14.5 percent in August, the biggest
monthly fall since September 2012, hurt by expectations of
bumper crops of competing oilseeds as well as a pick-up in
Southeast Asian palm output.
Stockpiles in Malaysia, the world's No.2 producer of the
tropical oil, stood at 1.68 million tonnes at the end of July,
and are expected to hit a seven-month high at end-August as
production outstrips global demand from key consumers.
"If there is no action to address this trend, we are
expecting further declining prices until the end of the year
with average prices between 2,200-2,280 ringgit ($692.5-$717.7)
per tonne," the ministry said in the statement.
Both Malaysia and neighbour Indonesia, the world's biggest
palm oil producer, set export taxes on a monthly basis.
Malaysian palm oil rose for a third consecutive session on
Thursday to a one-week high of 2,033 ringgit.
($1 = 3.1770 Malaysian ringgit)
(Reporting by Trinna Leong and Anuradha Raghu,; Editing by
Stuart Grudgings and Michael Urquhart)