According to the latest report released by the oil journal World Oil World, headquartered in Hamburg, Germany, Indonesia's palm oil export tariff policy has boosted refined palm oil exports, hurting the interests of Malaysian palm oil refiners.

Oil World stated that the difference in export tax rates has made Indonesian processors more competitive than Malaysian refiners.

At the end of last year, Indonesia reduced the export tariff on refined palm oil from 25% to 13%, while the export tariff on crude palm oil was set at 22.5%. In the fourth quarter of 2011, Indonesia’s refined palm oil exports increased significantly by 29% to 2.9 million tons, while CPO’s exports fell by 23% to 2.28 million tons.

Oil World pointed out that Malaysian palm oil processing industry is under threat unless the government adjusts the tariff structure of CPO and refined palm oil similar to Indonesia.

Indonesia's export tariff policy has increased domestic processing profits, prompting rapid expansion of refining capacity, while Malaysia's refining capacity utilization rate has declined.

In February of this year, Malaysia announced the tax-free export quota for palm oil of 3.6 million tons to help plantation owners. The oil world said that the government may face more pressure to allow more tax-free exports.

Oil World stated that in the long run, this is not a solution. The Malaysian refining industry still faces major problems.

The duty-free CPO export has made Malaysian domestic refiners worse off. In recent weeks, Malaysia's refining profits have turned into losses.

From October to December 2011, refined palm oil accounted for about 56% of total Indonesian palm oil exports, a record high, compared with 43% in the same period of last year and 41% in the same period in 2010. .

Oil World stated that it is clear that the ultimate goal of the Indonesian government is that most of the CPO production will be processed domestically and then exported.

Affected by Indonesia's export tariff structure, Indian and Chinese refiners are also facing a decline in processing profits.