Crude palm oil reference price in Malaysia increases for August, boosting duty to 9%
In a recent announcement made by the Malaysian Palm Oil Board, the country has increased its reference price for Crude Palm Oil (CPO) for the month of August 2025. The new reference price stands at RM3,864.12 per metric ton, a slight increase from July's RM3,730.48 per metric ton.
The adjustment in the reference price has led to an increase in the export duty, which now stands at 9%. This is a rise from the 8.5% duty imposed in July. The export duty structure for CPO in Malaysia is graduated, meaning it varies depending on the price range. For instance, the duty starts at 3% when prices range from RM2,250 to RM2,400 per tonne, with the maximum duty rate of 10% kicking in when prices exceed RM4,050 per tonne.
The current duty rate of 9% is due to the reference price being between RM3,730 and RM3,864 per tonne, higher than July's 8.5% duty but below the 10% cap. This linkage between price and export duty reflects Malaysia’s policy to balance market stability and revenue from its palm oil exports.
The increase in the reference price and the subsequent rise in export duties are influenced by several factors. These include production declines in Malaysia and Indonesia, demand surges, especially from India, and global market factors such as the price relationship between palm oil and competing oils like soybean and sunflower oil.
Despite a dip in early 2025, CPO prices are projected to rise to around $1,200 per metric ton by the end of the year, further affecting export duties and market behavior. This upward trend is expected to continue, with expectations that prices will rise toward RM4,200 by year-end.
Malaysia, the world's second largest palm oil exporter, has implemented this adjustment in the reference price and export duty to reflect the market conditions and maintain stability in the palm oil sector. The new export duty rate of 9% will be in effect for the month of August 2025.
The adjustment in the reference price for Crude Palm Oil (CPO) has resulted in an increased export duty for Malaysia, with the new duty rate set at 9%. This change is a response to the market conditions in the industry, influenced by factors such as production declines, demand surges, and global market conditions, including the price relationship with competing oils like soybean and sunflower oil. The export duty in Malaysia's finance sector is graduated, meaning it varies based on the price range of CPO, with the current rate due to the reference price being between RM3,730 and RM3,864 per tonne.
