KUALA LUMPUR: Malaysia’s commodities ministry has proposed cutting the export tax on palm oil by as much as half to help fill a global edible oil shortage and grow the market share of the world’s second-largest palm oil producer.
Plantation Industries and Commodities Minister Zuraida Kamaruddin said in an interview with Reuters on Tuesday her ministry has proposed the cut to the finance ministry, which has set up a committee to look into the details.
Malaysia could cut the tax, likely a temporary measure, to 4%-6% from the current 8%, Zuraida said.
A decision could be made as early as June, she said.
Malaysia is looking to boost its share of the edible oil market after Russia’s invasion of Ukraine disrupted sunflower oil shipments and Indonesia’s move to ban palm oil exports further tightened global supplies.
“During these times of crisis, probably we can relax a little bit so that more palm oil can be exported,” Zuraida said.
The proposal also asked the Finance Ministry to expedite the tax cut for state-linked palm oil producer FGV Holdings - Malaysia’s largest - and companies with overseas oleochemical production, she said.
Malaysia will as well slow the implementation of its B30 biodiesel mandate, which requires a portion of the nation’s biodiesel to be mixed with 30% of palm oil, to prioritise supply to global and domestic food industries, she said.
“We have to prioritise to give food to the world first,” Zuraida said.
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