iGrain India - The Malaysian government has announced an increase in the export duty on palm oil due to a rise in the reference price of crude palm oil (CPO) for January 2025.
While the export duty rate will remain at 10%, the total duty payable will increase as a result of the higher reference price.
For January 2025, the reference price of CPO is estimated to be 5001.72 ringgit per tonne, up by 530.33 ringgit from the December 2024 estimate of 4471.39 ringgit per tonne.
This increase means that the total export duty payable will rise by 50.03 ringgit per tonne, from 447.139 ringgit in December 2024 to 500.17 ringgit in January 2025.
In US dollar terms, the duty payable will increase by $11.97 per tonne, from $100.12 in December 2024 to $112.09 in January 2025.
This increase in the actual export duty could have an impact on the cost competitiveness of Malaysian palm oil in international markets.
Malaysia is a major exporter of palm oil, with countries like India, China, and the European Union being top importers.
However, India's recent increase in its palm oil import duties by 20 percentage points could make imports more expensive, potentially affecting demand.
Additionally, the benchmark futures price for Malaysian palm oil is currently at a high level, which may also influence trade flows.