This article first appeared in The Edge Financial Daily on October 17, 2018

KUALA LUMPUR: Revising the crude palm oil (CPO) export duty is among the measures that may be taken to ensure the price competitiveness of Malaysian CPO, said Primary Industries Minister Teresa Kok.

Kok, who was speaking to the media after officiating the biennial Oils and Fats International Congress yesterday, however said there are no ironclad commitments for any CPO export duty revision now.

Reporters had earlier asked Kok about the 500,000 tonnes of palm oil which China may consider buying from Malaysia.

She said: “They (China) are still importing [palm oil from Malaysia currently], but it is just that our price is a bit higher than Indonesia, which is why they take more from Indonesia.”

“I think it requires long-term study and discussions (on measures to be taken to make Malaysian CPO prices comparable to that of Indonesia). [On export duty], we will study and announce it later, but no commitment,” she added.

In her speech, Kok said her ministry acknowledges the labour issue faced by the industry and will continue to work with the relevant authorities to address it.

“While the industry willingly pays all sorts of taxes when competitors subsidise their farmers, more reasonable harmonious taxation will be looked into in view of the competition of our bigger neighbour,” she said.

Kok added that the government will also continue to emphasise on technology and innovation, to further enhance the palm oil industry’s performance through new technologies and innovations.

“It is heartening to see the developments of new hybrid palms from genomic advances.

“It is believed that oil palm can be engineered to be even more productive and an affordable source of nutrient.

She reiterated that the ministry looks forward to have high value-added downstream products, and the alternative usage for palm oil, such as biodiesel, to stabilise palm oil prices, reduce excess supply, and spur the industry’s growth.

Malaysia’s CPO export duty for September and October 2018 was set at 0%, following the cut from 4.5% in August.

At the time of writing, the benchmark palm oil third-month contract for January delivery was traded RM3 higher at RM2,245 per tonne.