Industry experts believe that Indonesia’s decision to raise export taxes on crude palm oil (CPO) will boost demand for Malaysian CPO, making its price more competitive.
According to Dar Securities, Malaysia could see increased palm oil demand if Indonesia proceeds with plans to raise export taxes to support higher biodiesel blending requirements. The firm noted that an increase in Indonesia’s export tax to 10% would raise the price of Indonesian CPO by $26.49 per ton, making it even more expensive than Malaysian palm oil. Currently, Indonesian palm oil is already priced $146.30 per ton higher than Malaysian palm oil.
David Ng, a senior proprietary trader at IcebergX Sdn Bhd, echoed this sentiment, stating that the higher Indonesian export tax would enhance the competitiveness of Malaysian palm oil. “As a result, we anticipate stronger demand for Malaysian palm oil due to its lower price,” he added.
The expected rise in demand presents an opportunity for Malaysia to reinforce its position as a stable and reliable CPO supplier in the global market. As the world’s second-largest producer and exporter of crude palm oil, Malaysia can leverage its well-established infrastructure, commitment to sustainability, and Indonesia’s increased export costs to enhance its competitiveness.
With global buyers seeking more cost-effective alternatives, Malaysian crude palm oil producers stand to benefit from higher sales volumes and stronger market positioning in the palm oil industry.