Malaysia's CPO Export Tax Suspension to Benefit Plantation Companies

KUALA LUMPUR, Jan 9 (Bernama) -- The Malaysian government’s decision to suspend the crude palm oil (CPO) export tax for three months is expected to benefit plantation companies with significant upstream operations and strengthen commodity prices in the first quarter of the year. Felda Global Ventures Holdings Bhd (FGV) Group President/Chief Executive Officer, Zakaria Arshad, said industry players are faced with issues of high CPO stock levels, and the strengthening of the ringgit had pressured the CPO price to around US$624 (RM2,500) per tonne. “The decision is timely and an effective way to reduce CPO stock levels which coincides with increasing demand from China for the upcoming Chinese New Year. “With this development, we expect a 30-50 per cent increase in the export volume to major importing countries like India, Pakistan, China and Europe. This will also enable us to increase supply to our joint-venture refinery in Pakistan at a more competitive pricing,” he said in a statement Tuesday. Zakaria said based on this situation, FGV expects average CPO prices for the first quarter 2018 to improve slightly by trading around US$662 (RM2,650) to US$687 (RM2,750) per tonne. Meanwhile, in commenting on the overall 2017 performance, he said FGV’s core business operations had performed well, with positive growth on fresh fruit bunches production compared to 2016. “As for 2018, we remain committed in delivering the Strategic Plan 2020 through a better core business performance, stronger financial position, enhance governance in all sectors and a high-performance culture to deliver sustainable value to shareholders,” he added. FGV is a Malaysian-based global agricultural and agri-commodities company. -- BERNAMA