KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Indonesia, the world's largest palm oil exporter, plans to reduce export levy rates on palm oil to enhance its competitiveness against other vegetable oils like soybean and sunflower oil. The move aims to attract major buyers such as India and China and improve small farmers' income, a government official said on Wednesday.
Key Highlights:
Restoring Price Competitiveness: Palm oil, traditionally the cheapest among vegetable oils, has lost its price advantage in recent months due to ample supply, making it less attractive to buyers. By lowering the export levy, Indonesia hopes to restore palm oil’s competitive pricing and improve the welfare of small farmers, who often face lower prices due to higher export taxes.
Current and Proposed Changes to Levy Structure: Under the existing rules, Indonesia imposes a levy ranging from $55 to $240 per metric ton for crude palm oil exports, depending on global prices. The levy is charged on top of a separate export tax. The new plan involves simplifying the levy brackets, although specific details have not been disclosed.
Impact on Export Volumes and Revenue: The proposed changes come as Indonesia's palm oil exports dropped by 7.65% year-on-year in the first half of 2024, totaling 15.07 million metric tons. The reduction in the levy is intended to stimulate demand and increase exports, while also supporting smallholder farmers by raising their income.
By lowering the export levy, Indonesia aims to enhance the global appeal of its palm oil, regain market share, and support the country's palm oil industry amid changing market dynamics.
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