Indonesia, the world’s largest palm oil producer, is considering reducing export taxes to boost competition with Malaysia, which set its tariff for the crude variety at zero this month to help clear record stockpiles.
“Ideally it should be at zero too,” Trade Minister Gita Wirjawan told reporters in Jakarta today. The possible reduction “can be at any level, as long as it can help maintaining the downstream-industry development and our competitiveness,” he said, referring to processors and refiners.
Enhanced competition from Indonesia for overseas sales of the most-used cooking oil may erode Malaysian exports, deepening a bear market in crude palm oil in Kuala Lumpur. Malaysia’s reserves gained to the highest ever last month, data showed yesterday, and surveyors said exports fell in the first 10 days of January. The two countries account for 87 percent of global shipments, according to U.S. Department of Agriculture figures.
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