Reduction in export tax on Malaysian palm oil due to reduction in reference price

26-Jun-2025 12:57 PM

Kuala Lumpur. The government of Malaysia, the world’s second-largest producer and exporter of palm oil, has set the reference price of this key vegetable oil at 3,730.48 ringgit per tonne for July 2025.

This is a decrease of 196.11 ringgit compared to June’s reference price of 3,926.59 ringgit per tonne. Based on this reduction, the export tax on palm oil has also been lowered from 9.5 percent to 8.5 percent.

This 1 percentage point reduction in export tax will reduce the tax burden on palm oil exports. In Malaysian currency, the export tax per tonne will decline from 373.03 ringgit in June to 317.09 ringgit in July.

In US dollar terms, the tax will drop from $86.65 to $74.86 per tonne, offering some relief to India and other major importing countries.

The decision to cut the export tax comes amid the peak production season in Malaysia and rising inventory levels. Industry analysts note that due to high palm oil prices in Malaysia, several Indian refiners had cancelled crude palm oil (CPO) import contracts scheduled for delivery between July and September.

Since India is one of the largest buyers of Malaysian palm oil, these cancellations raised concerns for the Malaysian government, prompting the move to make exports more attractive.