Malaysia to take steps to make palm oil industry competitive

Indonesia's export duty on palm oil 19.5%, much lower than Malaysia's export duty of 30%

Malaysia, the world's second largest palm oil producer, will soon take steps to make the country's palm oil industry competitive against rival Indonesia.

Indonesia, the world's largest palm oil producer, has kept export duty on crude palm oil at 19.5%, much lower than Malaysia's export duty of 30% after a duty-free limit of 3.6 million tonnes.

"I am preparing a submission to the Cabinet to see how the tax structure promulgated by Indonesia can affect the industry in Malaysia," Malaysia Plantation Industries and Commodities Minister Tan Sri Bernard Dompok told reporters here, after meeting Food Minister K V Thomas.

The government has not made any decisions yet in this regard. But steps will be taken to make entire palm oil industry competitive, he added.

Dompok said he has received complaints from trade bodies on impact of export duty cut in Indonesia on Malaysia's trade.

The palm oil industry has been demanding lowering of the export duty in Malaysia to make palm oil competitive against Indonesia.

On palm oil production, Dompok said the country is likely to achieve the target of about 19.3 million tonnes in 2012 despite lower production in the first quarter.

Palm oil production is expected to pick up in the next two to three months, he added.

Dompok is on a six-day visit to India to strengthen bilateral relations.