Malaysia's export tax on crude palm oil will remain at 5.5% for May, unchanged from April, the Malaysia Palm Oil Board's website showed Tuesday.
Biodiesel producers and traders said the tax rate would not impact Malaysian biodiesel prices, which currently stand at around $955/mt FOB.
"You would only be affected if you exported CPO, then you would get taxed. There's no tax if you buy local CPO," said FCStone Asia's palm analyst Bud Suwardi.
Malaysian biodiesel is about $65-75/mt more expensive than Indonesian material, they said.
This is partly due to Indonesia's export tax on CPO being much higher, currently at 13.5%, which discourages CPO exports and provides local biodiesel producers with an ample supply of cheaper feedstocks.
Indonesia's high tax on CPO exports over the past three years had clearly discouraged Indonesian palm oil producers from exporting CPO, a biodiesel broker said.
"Instead, they have developed their downstream from cooking oil to laurics to biodiesel because the tax encourages them to sell CPO competitively in Indonesia," he said.
Biodiesel traders said that unless Malaysia similarly increased its CPO export tax to discourage exports, and also integrated its palm plantations with downstream production, Malaysian biodiesel producers would continue to struggle to compete with Indonesian producers. Malaysian labor costs are also around 30% higher.
CPO and its derivatives like refined, bleached and deodorised palm oil, olein and stearin, are feedstocks for biodiesel.
The European Commission imposed antidumping duties of Eur120-180/mt ($166-248/mt) on biodiesel imports from Indonesia last November, and noted Indonesia's tax on CPO exports at that time, at 9-10.5%, encouraged its palm oil refiners and producers to sell the commodity and refined palm products domestically at below market prices.
Indonesia's April reference price for CPO is $972.88/mt, up $88.27/mt from March, while Malaysia's for May is a lower MR2,693.26/mt ($829/mt), up MR94.50/mt month on month.
Malaysia's export tax on CPO is adjusted on the 15th of each month. Indonesia's export tax on CPO is adjusted in the last week of each month, and currently stands at 13.5% for April, up 3% from March.
