Malaysian Palm Oil Futures and Export Taxes

After a long holiday weekend, trading resumed. Malaysian palm oil futures stayed below MYR 3,750 per tonne. There are worries about lower exports.

Key data points include:

• Shipments of Malaysian palm oil products dropped 16.1% to 1,057,955 metric tons from Dec. 1-25, according to Intertek Testing Services.
• Malaysia maintained its 8% export tax for crude palm oil in January but increased its reference price.

In October, Indonesia, the leading palm oil producer, shipped 3.0 million metric tons of palm oil products. This is a 31% decrease from the previous year but an 11.4% increase from the previous month.

• Jakarta recently announced fines totaling IDR 4.8 trillion (USD 310.1 million) for palm oil companies operating in forest areas.
• India, the top buyer, will permit the import of edible oils at reduced import tax rates until March 2025. The import duty structure was initially set to expire in March 2024.

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