Malaysia left the tax on crude palm oil exports unchanged for a sixth month in August as the world’s second-largest producer seeks to boost shipments amid falling demand. Futures dropped to a two-month low.
Shipments will be taxed at 4.5 percent next month as the reference price was set at 2,383.84 ringgit ($748) a metric ton, within the minimum band for a levy to be applied, according to a Customs Department statement. The tariff was zero in January and February before being raised to 4.5 percent in March.
Futures of the tropical oil, which competes with soybean oil in food and biofuels uses, have tumbled 27 percent in the past year as production outpaced demand, boosting inventories in Malaysia to a record in December. The Malaysian government said in October it would cut the export tax to between 4.5 percent and 8.5 percent from about 23 percent to help trim the stockpiles and compete with Indonesia, the largest producer.
“The low export tax will still be supportive for shipments if demand is there,” said Alvin Tai, an analyst at RHB Investment Bank Bhd. “Soybeans have actually started arriving at their destination markets and that helped to soften demand for palm.”
Chinese state-owned grain companies bought eight cargoes of soybean oil that totaled 320,000 tons, four trading executives with knowledge of the transactions said July 10. China is the largest cooking oil consumer. South American soybean exports rose to a record in May, even as rain hampered loading and strikes in Brazil and Argentina curbed shipments, Oil World reported June 11.
Palm oil for delivery in September fell as much as 1.8 percent to 2,260 ringgit a ton on the Malaysia Derivatives Exchange, the lowest price for the most-active futures since May 7, and was at 2,266 ringgit at 12:12 p.m. in Kuala Lumpur. Shipments from Malaysia fell 16 percent to 352,375 tons in the first 10 days of July, surveyor Intertek
Shipments from Malaysia fell 23 percent to 547,857 tons in the first 15 days of July, surveyor Intertek said today. Exports rose 0.3 percent to 1.41 million tons in June, while inventories declined 9.4 percent to 1.65 million tons, the Malaysian Palm Oil Board said July 10.
Indonesia raised its export duty to 10.5 percent this month from 9 percent in June.