Malaysian headache from Indonesian duty cut

27 Dec 11

Indonesia's move to further lower its crude palm oil (CPO) export duty from 20% to 16% in the final quarter of 2011 is giving an additional headache to Malaysian palm oil refiners, oleochemicals and biofuel operators alike. This drastic move has put Indonesian palm oil refiners in an advantageous situation, whereby they can buy their CPO feedstock at a 16% discount, or about RM450 per tonne lower, than the actual CPO market price. To help “neutralise” the dire situation, it is believed that the Government is now asking Malaysian plantation companies to yet again subsidise the local refineries, oleochemicals and biofuels sector for up to RM2bil a year.
http://biz.thestar.com.my/news/story.asp?file=/2011/12/27/business/10163033&sec=business

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