KUALA LUMPUR: The increase in import tariffs in India and the reduction in export levies by Indonesia are part of normal changes in the global palm oil trade, with their effects on Malaysia's palm oil competitiveness being temporary.
Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said Malaysia's palm oil exports to India this year demonstrate competitiveness with an increase.
According to the Malaysian Palm Oil Board (MPOB) statistics for January to October 2024, palm oil exports to India increased 16.4 per cent to 2.67 million tonnes from 2.29 million tonnes during January to October 2023.
"This increase occurs amid India's import duties and Indonesia's export levies being raised.
"The ministry's long-term strategy considers changes in tax structures in importing countries and competing countries without needing reactive intervention," he said.
He explained this in a written response to a question from Datuk Seri Hamzah Zainudin (PN-Larut), who asked the Plantation and Commodities Ministry to state the short-term, medium-term, and long-term strategies for addressing drastic impacts on Malaysia's palm oil industry.
Hamzah, who is also the opposition leader, raised the issue following a 32 per cent increase in India's import tax and a reduction in Indonesia's export levy.
Regarding the increase in imports, Johari in a written reply published on the Parliament website, said this effective import duty, a term used by the Indian government, was raised to 27.5 per cent compared to 5.5 per cent for crude palm oil (CPO).
For processed palm oil, he explained, the duty was increased to 35.75 per cent compared to 13.75 per cent.
"Effective import duty refers to the basic import duty which considers other taxes like the Agriculture Infrastructure Development Cess and the Social Welfare Cess," he said.
Regarding the changes in Indonesia's export levy rates, Johari said it also affects competition in the global market, but Malaysia continues to maintain its position in the market through sustainable and high-quality palm oil production and exports.
"As a long-term step, the ministry through its agency, MPOB, will continue to strengthen industry competitiveness through research and development, as well as the production of high-value-added products like bioplastics and biofuels for the global market," he said.