The Royal Malaysian Customs Department has raised the export tax on palm oil to 6.5% from October 1 in a circular posted on the Malaysian Palm Oil Board website Thursday.
The rate, which is reviewed monthly, has been set at 5% since April. Prior to that, it was set at zero.
Customs in the circular set the average monthly price of palm oil in October at MR2,879.47/mt, equating to $693.36/mt.
If the department's average monthly price is set below MR2,250/mt, no export duty is applied. The maximum the duty can be set at is 8.5%.
Demand for Malaysian palm oil from regular importers like India was lower in the first 10 days of September than in the first 10 days of August and the duty hike in October will raise CPO prices, likely further reducing palm exports, market analysts said.
Malaysia's palm oil exports rose 31% month on month to 1.81 million mt in August, Malaysian Palm Oil Board data showed.
Analysts attributed the surge to seasonal festive demand in India and China.
