Indonesia to Lower CPO Export Duty from 20% to 16%

The Government must seriously look at the grave implication borne of a situation where local refiners would only be able to get a margin of RM50 per tonne while Indonesian refiners stand to reap RM450 per tonne.

And if the price of CPO feedstock were to increase further, local refineres would soon encounter a negative margin situation.

In the world market too, local refiners would not be able to offer a lower price compared with Indonesian refiners who have the privilege of securing CPO feedstock at discounted levels.

To help "neutralise" the dire situation, it is believed that the Government is now asking Malaysian plantation companies to yet again subsidise the local refineries, oleochemicals and biofuels sector for up to RM2bil a year.

This apparently does not sit well with local plantation companies as it would mean their taxes are bound to increase from 46% to about 60%.

As it is, plantation companies are already overtaxed compared with other companies, which are paying about 25% in corporate tax.