Increase in Indonesia's CPO Export Tax Could Boost Malaysian Crude Palm Oil: Experts

06-Feb-2025 10:55 AM

Increase in Indonesia's CPO Export Tax Could Boost Malaysian Crude Palm Oil: Experts
★ If Indonesia increases its CPO export tax to boost biodiesel usage, the demand for Malaysian palm oil may rise.
★ A hike in export tax to 10% will make Indonesian CPO more expensive by $26.49 per ton, which will make it costlier than Malaysian palm oil. Currently, Indonesian palm oil is $146.30 more expensive per ton compared to Malaysian palm oil.
★ Indonesia imposes export taxes on CPO and other palm oil products to implement its B40 biodiesel program.
★ In December 2024, the Indonesian government announced plans to increase the CPO export tax from 7.5% to 10% to raise subsidies for biodiesel. However, the implementation of the B40 policy has been delayed, and industry experts are concerned about financial and technical challenges.
★ After the new regulations come into effect, buyers may turn to Malaysia for more cost-effective export options.