Plantation Industries and Commodities Minister Zuraida Kamaruddin interviewed her ministry and has already proposed the cut to the finance ministry, which has set up a committee to look into the details.
She stated that Malaysia, the world’s second-largest palm oil producer, could trim the tax to 4%-6% from the current 8%.
The cut would likely be brief, and they could make a decision as early as June, Zuraida spoke.
Some Countries Propose Barter Trade
According to Zuraida, during these times of crisis, we can probably relax a little bit so that countries can export more palm oil.
Malaysia is examining increasing its share of the edible oil market after Russia’s invasion of Ukraine disrupted sunflower oil shipment; moreover, Indonesia’s move to exclude palm oil exports further tightened global supplies.
Palm oil, used in everything from cakes to detergent, accounts for almost 60% of global vegetable oil shipments. Hence, the lack of a top producer in Indonesia has rattled the market.
Zuraida told Reuters that importing countries had requested Malaysia to reduce its export taxes. Some, like India, Iran, and Bangladesh, offer barter trade.
Malaysia will also delay the implementation of its B30 biodiesel mandate, which demands a portion of the nation’s biodiesel to be mixed with 30% of palm oil to prioritize supply to food industries, she stated.