January 17, 2020 / 11:58 AM / a month ago

UPDATE 1-Malaysia increases February export tax for crude palm oil to 6%

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By Mei Mei Chu

KUALA LUMPUR, Jan 17 (Reuters) - Malaysia has raised its export tax for crude palm oil to 6% for February, the Malaysian Palm Oil Board said on Friday, citing the national customs department.

The world’s second-largest producer and exporter of palm oil calculated a reference price of 2,907.63 ringgit per tonne for next month.

Malaysia had set the export tax for January at 5%, raising it after placing a tax-free exemption on crude palm oil from May to December 2019 in a move to boost palm oil exports and expand into new markets.

Traders said the tax hike could lower Malaysia’s exports of crude palm oil (CPO).

“It may further restrain Malaysia’s export of CPO, but would benefit local refiners for exports of refined products,” said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading firm.

Some traders also said it would reduce the price difference between Malaysia’s CPO and Indonesia. Malaysian palm oil was trading at a discount of around $42 per tonnes to Indonesia before the export tax hike. (Reporting by Mei Mei Chu; Editing by Alex Richardson)

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