KUALA LUMPUR: Malaysia has approved a plan to cut crude palm oil (CPO) export taxes from the current level of 23 percent per tonne, a government source said on Thursday, as the world's No.2 producer tries to claw back market share from top producer Indonesia.
The cabinet will discuss the size of the cut on Friday, said the official at the commodities ministry, declining to be named because he was not authorised to speak to the media.
Commodities Minister Bernard Dompok has proposed for duties to be cut to 8-10 percent.
"There may or may not be a decision but the government is actively working on it. It will be a key focus of discussion for tomorrow," said the official.
The cut may boost Malaysia's CPO exports and give short-term support to benchmark Malaysian prices, which have lost 22 percent so far this year as a slowdown in shipments has swelled inventories.
Malaysia's palm oil stocks hit a record of nearly 2.5 million tonnes last month as output reached an all time high and export growth slowed considerably, piling pressure on the government to act to prop up prices.
Slower Malaysian exports were due mostly to competing Indonesian processors offering cheaper refined palm oil cargoes after Jakarta cut its own export taxes for processed grade last year to boost margins and lure investment.
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