Malaysia lower October CPO reference price and retains 8% export tax | Currency

Malaysia kept its CPO export tax unchanged at 8% for October while lowering its CPO reference price to RM3710.50/mt (US$790.50/mt) from the previous RM3755.13/mt in September, the Malaysian Palm Oil Board said in a circular today.

The change in reference price lowers the payable export duty for CPO to RM296.84/mt (US$63.24/mt) from September’s RM300.41/mt.

Last week, the world’s largest palm producer, Indonesia set the reference price for 16-30 September at US$798.83/ton, down for the third successive period and below the September 1-15 period which was at US$805.20/ton. The payable export duty and levy for CPO remain unchanged from the previous level at US$33/mt and US$85/mt respectively.

Indonesian CPO export has been enjoying a discount of US$50-60 on FOB basis over Malaysian in September, but this is nearly half of the advantage at the start of the year.

Indonesian export discount to Malaysia narrowed since the start of the year as the Malaysian ringgit depreciated sharply. Ringgit fell 6.63% against the dollar from the start of the year to market close yesterday, while the Indonesian rupiah edged up 1.34% during the same period.