Malaysia, the world’s second-largest palm oil producer, left a tax on exports of the crude variety unchanged after stockpiles jumped to the highest since March.
Cargoes will be taxed at 5 percent in January, according to a Customs Department statement on the website of the Malaysian Palm Oil Board. The reference price for calculating the tariff was set at 2,549.98 ringgit ($788) a metric ton, it said. Indonesia, the top supplier, last month raised its export tax to 12 percent for December from 9 percent in November.
Reserves in Malaysia climbed 7.2 percent to 1.98 million tons in November from a month earlier, while exports contracted 8.7 percent to 1.52 million tons, the biggest drop since February, data from the palm oil board showed. Shipments fell 14 percent to 640,240 tons in the first half of this month from the same period in November, surveyor Intertek said today. Futures rose to a 14-month high last month.
“Prices have been climbing, so keeping it unchanged is a good thing, otherwise it would have made exports even more expensive,” said Alvin Tai, an analyst at RHB Investment Bank Bhd. in Kuala Lumpur. “This will benefit the Malaysian exporters as it will make the export prices a little bit cheaper compared to Indonesia’s.”
Futures rallies to 2,692 ringgit on Nov. 22, the highest level since September 2012. The contract for delivery in February was 0.2 percent lower at 2,557 ringgit by the midday break on the Bursa Malaysia Derivatives, in Kuala Lumpur today.