JAKARTA (Dec 2): India is likely to buy more Malaysian palm oil after export levies imposed by top producer Indonesia hit record highs in the past year, India's Solvent Extractors' Association executive director BV Mehta said on Thursday (Dec 2).
Indonesia imposed higher export taxes and levies in the past year, making prices of palm oil — which already reached record highs this year — more costly for the top buyer.
"Indonesia's share of palm oil imports by India earlier was nearly 70%-75%," Mehta told the annual Indonesian Palm Oil Conference.
"Heavy export duties and levies being imposed by Indonesia [are] discouraging Indian refiners to buy from Indonesia," he said, adding that in January to September this year, Indonesia's share of Indian palm oil imports dropped to 55%, while Malaysia's jumped 45%.
Indonesia started taxing crude palm oil (CPO) exports again after a three-year absence in February last year, while export levies for the edible oil reached a record high of US$255 (about RM1,079) per tonne in February earlier this year.
In an effort to cool near-record price rises, India cut base import taxes on palm oil, soyoil and sunflower oil in September.
Indonesia has set its CPO export reference price higher for December, meaning that palm oil taxes and levies remain in the top brackets of US$200 per tonne and US$175 per tonne respectively.
Indonesia, however, is likely to remain a top supplier of palm to Pakistan, another major buyer, Abdul Rasheed Janmohammed, the chairman of the Pakistan Edible Oil Refiners Association, told the conference.
"I personally think Indonesia will have far better prices as compared to Malaysia and the quantity will be also high," Janmohammed said.
He also noted that Indian buyers are more dependent on CPO imports, while Pakistan imports more refined products with cheaper export duties.