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Malaysia expects higher demand for CPO as India raises refined oil tax

PETALING JAYA, Sept 5 (Bernama) —  Malaysia expects higher demand for crude palm oil from India as the country has increased the import tax on refined palm oil from Malaysia.

India, the world’s biggest importer of vegetable oil, said in a government statement on Wednesday that it raised the tax on Malaysian refined palm oil from 45 per cent to 50 per cent until March 2, 2020 to curb imports and boost local refining.

The country had imposed a 40 per cent import tax on crude palm oil (CPO) and 50 per cent on refined palm oil, but under an agreement with Malaysia, since January this year shipments of refined palm oil from Malaysia had been taxed at 45 per cent.

Malaysian Palm Oil Council chief executive officer Datuk Kalyana Sundram said India had imported substantial quantities of Malaysia’s refined palm oil in the last few months due to the lower tax -- in the first half of 2019, the imports jumped 727 per cent from the same period a year before. 

“Because of tax differentiation, we expect CPO will start finding its way into the India market now. We will see what the Indian importers will start doing,” he told reporters on the sidelines of the “Love My Palm Oil” carnival organised by MPOC in collaboration with Mydin Mohamed Holdings Bhd (Mydin).

The carnival was launched by Primary Industries Minister Teresa Kok Suh Sim. Also present was Mydin managing director Datuk Wira Ameer Ali Mydeen.

Kalyana noted that the increase in import duty would create a level playing field for Indonesian palm oil, which in the coming months is anticipated to eat into Malaysia’s refined palm oil market share.

However, he added there is still an opportunity for CPO as the commodity from Malaysia is still duty-free and would continue to be imported by Indian refiners.

— BERNAMA 

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