* Step is surprise after minister had said taxes would resume
* Move likely to support prices
* Rate has been scrapped since October (Adds detail, background)
KUALA LUMPUR, Feb 16 (Reuters) - Malaysia has kept tax on exports of crude palm oil at zero for March, a government circular showed on Monday, extending a duty-free policy held since October.
The move, which is likely to underpin prices, comes as a surprise as Malaysia’s plantation industries and commodities minister said last week the country was planning to resume taxing exports from March.
The rate was scrapped from October to December, and later extended to end-February.
Malaysia, the world’s second largest palm oil producer after Indonesia, calculated a reference price of 2,232.88 ringgit ($627) per tonne for March crude palm oil, effectively incurring an export duty of zero percent.
Increased global edible oil supplies and slowing demand have pressured palm oil prices which dropped 15 percent last year.
Authorities in Indonesia and Malaysian, which account for 85 percent of global palm oil production, are giving financial incentives in a bid to boost demand and support prices of the tropical product.
Indonesia has approved a threefold increase in biodiesel subsidies which is likely to take effect next month. ($1 = 3.5620 ringgit) (Reporting by Al-Zaquan Amer Hamzah and Anuradha Raghu; Writing by Naveen Thukral; Editing by Joseph Radford)