Feb. 19 (Bloomberg) -- Indonesia, the largest palm oil producer, may keep the duty on shipments of the crude variety unchanged at 9 percent in March, double the rate in Malaysia.
The March rate will probably be kept unchanged as the reference price is still about $849 a metric ton, Steaven Halim, an official at the Indonesian Palm Oil Association, said in an e-mailed statement.
The base price for calculating the levy exporters must pay may climb to $777 a ton from $744, he said. “Indonesia is still less competitive against Malaysia,” said Hariyanto Wijaya, an analyst at PT Mandiri Sekuritas in Jakarta.
The position is set to “improve slightly compared with this month because the gap will narrow.” Malaysia, the second-biggest supplier, raised the duty for crude palm exports to 4.5 percent in March from zero in January and February, according to a customs statement posted on the Malaysian Palm Oil Board website on Feb. 15.
Indonesia raised the duty to 9 percent this month from 7.5 percent in January. The Malaysian government said in October it would reduce the export tax from January to drain record stockpiles. Reserves slid 1.9 percent to 2.58 million tons last month from a record 2.63 million tons in December.
Indonesia’s inventories will probably shrink 14 percent to 3 million tons this month, according to estimates compiled by Bloomberg.
