Photo: Bernama

KUALA LUMPUR: Malaysia has reduced its export duty on crude palm oil (CPO) to zero for June 2020 from this month’s rate of 4.5 per cent, according to the Malaysian Palm Oil Board (MPOB) website.

The tax was exempted for most of last year — from May 1 to Dec 31 — but it was reinstated at a rate of five per cent in January this year. 

The MPOB said the country, which is the world’s second largest producer and palm oil exporter, had calculated the palm oil reference price at RM2,122.77 per tonne for June 2020.

Meanwhile, palm oil trader David Ng said this was a welcome move as Malaysia’s palm oil inventory rose to more than two million tonnes in April, and production increased to a six-month high amid Covid-19 which had impacted traders’ demand.

“Despite Covid-19’s impact around the world, inadvertently eroding global demand for palm oil, Malaysia’s exports grew in the first 15 days of May 2020.

“With the seeming recovery of palm oil, the zero-rated tax would taper off the current stockpile that Malaysia possesses,” he told Bernama today.

It was reported that Malaysia’s palm oil prices had declined approximately 35 per cent since January this year. The commodity is currently traded at RM2,081 per tonne for spot month May 2020 on the Bursa Malaysia Derivatives futures market. – Bernama