Palm oil-related stocks advance as France ditches added tax plan

Palm oil-related stocks advance as France ditches added tax plan
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KUALA LUMPUR (June 23): Shares of plantation-related stocks advanced, albeit marginally after France's National Assembly on Wednesday (June 22) scrapped plans for an additional tax on palm oil, which had raised an outcry in major producing countries, after the government said it would propose a new tax scheme for vegetable oils used in food.

Among the advancing stocks were IOI Corporation Bhd, Kuala Lumpur Kepong Bhd, Sime Darby Bhd, TSH Resources Bhd, United Malacca Bhd and United Plantations Bhd.

The world's two largest palm oil producers, Indonesia and Malaysia, had said the tax, which aimed at encouraging the sector to reduce the environmental damage palm oil plantations can cause, was discriminatory and against international trade rules, according to Reuters.

The government proposed a last-minute amendment, which states the State will put forward a new scheme within six month after the law's promulgation this summer, to harmonise taxes on vegetable oils and include a tax exemption for sustainable oils based on "objective criteria", it said.

Palm oil is one of the less taxed vegetable oils in France.