Malaysia may cut palm oil export tax amid global supply crisis

Malaysian Commodities and Crop Industry Minister Zuraida Kamaruddin said in an interview with Reuters on May 10, the ministry had proposed a tax cut. palm oil export with the Ministry of Finance. The Malaysian Ministry of Finance has set up a committee to look into the details.

Ms. Zuraida said, Malaysia, the country palm oil production the second largest in the world, it is possible to cut this tax, which can be seen as a temporary measure, to 4% – 6% from the current 8%. The decision will be made in June at the earliest.

Malaysia is looking to increase its share of the market cooking oil world after Russia launched a military attack on Ukraine, disrupting Ukraine’s sunflower oil exports. And Indonesia’s move to ban palm oil exports tightens the global supply of cooking oil.

“In this time of crisis, maybe we can loosen up more to export more palm oil,” Zuraida said.

The proposal also requires the Malaysian Ministry of Finance to expedite tax cuts for state-linked palm oil producer FGV Holdings, Malaysia’s largest state-affiliated company, and overseas oleochemical producers, said Minister Zuraida. .

Malaysia will also prolong the implementation of the mandatory use of biodiesel B30, which requires a portion of the country’s biodiesel to be mixed with 30% of palm oil, in order to give priority to supply to industries. global and domestic food industry.

“We have to prioritize feeding the world first,” said Ms. Zuraida.

Transporting raw materials at a palm oil factory in Bahau, Negeri Sembilan, Malaysia, January 30, 2019. (Photo: Reuters)

Palm oil, used in everything from pastries to detergents, accounts for nearly 60 percent of global vegetable oil shipments and the absence of the world’s top palm oil producer Indonesia has wobbled. Global market.

Crude palm oil futures prices have risen about 35% this year, to an all-time high, exacerbating global food inflation.

The Food and Agriculture Organization of the United Nations has warned that food prices, which rose to a record high in March, could rise by as much as 20% as a result of the Russia-Ukraine conflict, further increasing the risk of malnutrition. aggravated.

Ms. Zuraida said that importers from India, Iran and Bangladesh are offering to exchange agricultural products such as rice, wheat, fruit and potatoes for Malaysian palm oil.

Malaysia’s manufacturing activity has been under strain for more than two years due to a severe labor shortage following border restrictions due to the COVID-19 pandemic, which has halted migrant workers.

Ms. Zuraida told Reuters news agency ahead of her visit to the US this weekend that, with travel restrictions eased, foreign workers will start coming to the country to work from mid-May.

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