Malaysia may drop palm oil export tax to ease record inventories and boost competitiveness
The Malaysian government is weighing a waiver of the 10% crude palm oil export tax to help clear a record 3.5 million-tonne stockpile and improve export competitiveness against Indonesia.
Malaysia is contemplating a temporary suspension of its 10% export tax on crude palm oil to address a record-high stock of 3.5 million tonnes and to regain competitiveness with Indonesia, whose palm oil sells at a RM700-RM900 per tonne discount. The Plantation and Commodities Ministry is expected to meet industry representatives to explore the waiver, which analysts believe would be welcomed and could be implemented soon.
While upstream plantation companies could benefit from stronger demand and better pricing, downstream processors may face pressure on margins if cheaper raw material becomes scarcer. The government previously lifted the tax for six months in 2020 and some suggest keeping the waiver in place until inventories drop below 2 million tonnes. The policy discussion coincides with plantation firms preparing third-quarter 2026 results, where higher fresh fruit bunch output and rising CPO prices have already bolstered earnings expectations.
Why it matters
A tax waiver could lower Malaysia's palm oil costs, helping exporters compete globally and reduce costly stockpiles.
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