The full outcome is expected to be known at the end of this month, says deputy minister
The three-month suspension of the export tax on crude palm oil (CPO) has helped lower stock levels and strengthen the edible oil’s prices, said Deputy Plantation and Commodity Industries Minister Datuk Datu Nasrun Datu Mansur.
“In January last year, the CPO average price increased by 3.3% to RM2,486.50 per tonne, compared to RM2,408 per tonne in December 2017,” he told the Dewan Rakyat yesterday.
“On Jan 31 this year, one month after its implementation, the final stock of palm oil showed a decline of 6.7% to 2.55 million tonnes.
“Out of those, the CPO’s final stock decreased by 5.7%, or 95,481 tonnes, to 1.57 million tonnes, while the final stock of processed palm oil decreased by 8.4%, or 88,932 tonnes, to 970,000 tonnes,” Datu Nasrun added.
He was responding to a question from Parit MP Datuk Mohd Zaim Abu Hasan who asked how the implementation of the scheme without export duty had reduced palm oil stocks and strengthened its market price.
Datu Nasrun said the decline was in line with the 85,815 tonnes of increase in palm oil exports in January to 1.51 million tonnes, compared to 1.43 million tonnes in December 2017.
“The full outcome of (the scheme) is expected to be known at the end of this month,” he noted.
Datu Nasrun said before the implementation of the scheme, the final stock of palm oil was 2.73 million tonnes on Dec 31, 2017.
“The CPO price was at its lowest level on December last year at RM2,407 per tonne, as a result of the excess supply of palm oil in the market.
“Palm oil stocks during the month also rose significantly from 2.55 million tonnes in November 2017,” he added.
Responding to additional questions from Mohd Zaim on other efforts to strengthen the palm oil market and improve its quality, Datu Nasrun said the government is actively exploring new markets to address declining demand, particularly from European countries.
He said Malaysia has identified countries with market potential for palm oil, including China, Iran and the Philippines.
To recap, on Jan 6, 2018, Malaysia had suspended export taxes on CPO for a three-month period starting on Jan 8 to boost prices and reduce high stockpiles.
The export tax suspension was said to only be lifted prior to the three-month period if CPO stocks fall to 1.6 million tonnes.
However, on March 22, 2018, the government had announced its decision to resume taxing exports of the edible oil.