India’s recent move to cut import tax on Southeast Asian palm oil helped buoy plantation stocks in Malaysia, brightening the outlook for a sector that is enjoying a sharp rise in prices tracking tighter supplies.
The lower duty rate imposed by the world’s biggest buyer of vegetable oil helped to narrow the price gap between palm oil and other competing oils such as soybean and sunflower, raising the appeal of the edible oil exported from Malaysia and Indonesia, analysts said.
“This latest tax revision is set to boost Malaysia’s refined palm oil exports to India in the coming months,” Public Investment Bank’s Analyst Chong Hoe Leong said. “The favorable move should help drive down Malaysian palm oil inventories and provide support to the current strong CPO (crude palm oil) prices.”
The most-traded crude palm oil futures contract on Bursa Malaysia Derivatives for March delivery gained up to 1.4% to 3,096 ringgit on Thursday. Sime Darby Plantation, the world’s biggest palm oil producer by acreage, climbed as much as 1.3% in Kuala Lumpur trading.
The duty on refined palm olein was reduced to 45% from 50%, while the levy on crude palm oil import was cut to 37.5% from 45% under bilateral agreements between Malaysia and India as well as that between India and the Association of Southeast Asian Nations.
India’s recent move to cut import tax on Southeast Asian palm oil helped buoy plantation stocks in Malaysia, brightening the outlook for a sector that is enjoying a sharp rise in prices tracking tighter supplies.
The lower duty rate imposed by the world’s biggest buyer of vegetable oil helped to narrow the price gap between palm oil and other competing oils such as soybean and sunflower, raising the appeal of the edible oil exported from Malaysia and Indonesia, analysts said.
“This latest tax revision is set to boost Malaysia’s refined palm oil exports to India in the coming months,” Public Investment Bank’s Analyst Chong Hoe Leong said. “The favorable move should help drive down Malaysian palm oil inventories and provide support to the current strong CPO (crude palm oil) prices.”
The most-traded crude palm oil futures contract on Bursa Malaysia Derivatives for March delivery gained up to 1.4% to 3,096 ringgit on Thursday. Sime Darby Plantation, the world’s biggest palm oil producer by acreage, climbed as much as 1.3% in Kuala Lumpur trading.
The duty on refined palm olein was reduced to 45% from 50%, while the levy on crude palm oil import was cut to 37.5% from 45% under bilateral agreements between Malaysia and India as well as that between India and the Association of Southeast Asian Nations.
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