KUALA LUMPUR: Malaysia's decision to set its crude palm oil (CPO) export tax for March at 4.5 per cent, up from zero per cent in January and February, will give local refiners a reasonably good margin to survive.
Palm Oil Refiners Association of Malaysia (Poram) chief executive officer Mohammad Jaaffar Ahmad said the imposition of the tax will level the playing field with Indonesia as well as increase its utilisation to more than 70 per cent from 60 per cent before.
"We are not against the export of tax-free CPO, but first you must ensure there is enough supply for local refiners. This is what we want as the tax will make it more expensive for palm oil producers to sell overseas and it can be used to make palm olein at local refineries," Mohammad Jaaffar told Business Times in a phone interview yesterday.
Mohammad was commenting on the government's circular yesterday which decided to set its crude palm oil export tax for March at 4.5 per cent, from zero per cent in January and February.