Malaysia mulls CPO tax waiver as palm oil stocks hit record 3.5mil tonnes

KUALA LUMPUR: Malaysia is mulling waiving the crude palm oil (CPO) export tax to help clear record-high inventories and close the pricing gap with Indonesia. The Plantation and Commodities Ministry is set to discuss the proposal with industry players. According to ESG Malaysia executive director Dr Harald Sippel, the move could help Malaysia reduce swelling inventories and boost exports, but it is unlikely to eliminate the price gap or deliver lasting competitiveness.

Sippel estimates that every million tonnes of CPO exported tax-free would cost the Treasury around RM450 million at current prices. The waiver could lift shipments in the short term, particularly to price-sensitive markets like India. However, Malaysia must also focus on boosting domestic demand, improving yields, replanting, and strengthening supply-chain traceability to achieve lasting competitiveness.