KUALA LUMPUR: There is a good chance that palm oil may regain some market share it lost previously in India after the government announced a reduction in import duties on crude palm oil and refined palm oil, effective Jan 1, 2019.
As long as the Indian government keeps import duties of other vegetable oils unchanged, it would help Malaysia increase its exports, lower stockpile and lift crude palm oil prices,” said Maybank Kim Eng in a research note yesterday.
India is the world’s largest importer of palm oil, taking in about 15.5 million tonnes, annually, of the edible oil largely from Malaysia and Indonesia.
The cut in import duties is a fulfilment of a commitment made in comprehensive economic cooperation agreement signed between Malaysia and India years ago, said the leading investment broking and securities group based in Singapore.
The duty on crude palm oil from Malaysia, Indonesia and other ASEAN countries was cut to 40 per cent from 44 per cent while the tax on refined palm oil was reduced to 45 per cent from 54 per cent.
Maybank Kim Eng, which maintained a ‘neutral’ call on the regional plantations sector, said Malaysian-based refiners and exporters would benefit comparatively more, mostly at the expense of Indonesia.
The timely stimulus would boost exports as the physical price of crude palm oil rebounded from its low of
RM1,717 per tonne on Nov 21, 2018 to RM1,953 per tonne on Dec 28, 2018.
“India’s comparatively higher import duty cut for Malaysia’s refined palm oil (vis-a-vis Indonesian refiners) would provide further boost to Malaysia’s palm oil export competitiveness,” it added. – Bernama
