Description

Date - 22nd Jun 2021

Malaysia overtook Indonesia to become India's largest crude palm oil (CPO) exporter in 2020-2021. Indonesia imposed high taxes on edible oil exports last year. Malaysia's palm oil exports to India rose 238% to 2.42 million tonnes in the first seven months of 2020-2021, according to the Solvent Extractors’ Association of India (SEA), a trade organization for Indian processors and vegetable oil traders. the marketing year began on November 1st.

During the same period, Indonesian palm oil shipments to India fell 32 percent to 2 million tons.

Malaysia surpassed Indonesia as the largest exporter of palm oil to India

Indonesia imposed high taxes on edible oil exports in December 2020 to raise funds for its palm oil-based biodiesel program and maximize domestic edible oil use. Indonesia's export duties have been at their highest for five consecutive months, according to trade representatives.

Malaysian planters benefit from export tax from Indonesia. They have increased market share by offering palm oil at a discount over Indonesian supplies, Solvent Extractors’ Association of India (SEA) said.

Importance of export taxes

In comparison, in June 2021, Indonesia's export duty levied US $ 438 per tonne on palm oil shipments, while Malaysia levied US $ 90 per ton. Experts say the difference in export duty has helped Malaysian exporters offer palm oil at a significant discount even after maintaining good margins.

What if Indonesia lowers export duties?

There are reports that Indonesia will cut export duties and Malaysia's growing shipments to India will soon be curtailed as well. Mulyani Indravati, Indonesia's finance minister, said on June 21 that the government would cut the maximum levy on crude palm oil (CPO) to $ 175 per tonne from $ 255, without specifying a timeframe.

Experts also say that after a sharp drop of more than 25% over the past two weeks and Indonesia speculating about cutting oil duties, Indonesia may regain market share.

For more Updates and Information - Click here 

For access to more than 10,000 Colleges - Click here

For Latest Sarkari Jobs - Click here

For Comprehensive Preparation of Competitive Exams - Click here

For School Studies and Exams Preparation across Eight Boards - Click here