Malaysia raises Aug ref price for CPO export tax, rate stays at 8%

Malaysia has maintained its crude palm oil (CPO) export tax rate for August at the maximum level of 8% while raising its reference price, the Malaysian Palm Oil Board (MPOB) said in a circular issued Friday.

The CPO reference price for August will be raised to MYR3,614.28/mt ($793/mt) from MYR3,604.73/mt previously, with the resulting payable export duty raised to MYR289.14/mt ($63.5/mt) from July’s MYR288.38/mt.

The export duty rate remains unchanged at the maximum rate of 8% as the reference price remains above the threshold of MYR3,450/mt based on the current tax structure.

Malaysia’s export tax for CPO works on a progressive rate structure, starting from 3% for when CPO prices are between MYR2,250-2,400/mt.

Meanwhile, neighbouring producer Indonesia has raised its CPO reference price for July 16-31 to $791.02/mt from the previous $747.23/mt, effectively raising its export duty and levy to $33/mt and $85/mt from $18/mt and $75/mt with taxes for other palm products also due to be raised.

The increase in Indonesian taxes further narrows the discount against Malaysian palm products, which has seen an improvement in exports this month with July 1-10 exports rising between 17.2-26.09% from the same period in June, based on estimates by cargo surveyors.