Palm | Kelapa Sawit

KUALA LUMPUR, Oct 4 (Reuters) - Malaysia could cut its crude palm oil export taxes to between 8-10 percent from the current 23 percent, a commodities ministry official said on Thursday, a move that could lend support to prices and stiffen competition for No.1 producer Indonesia.

The ministry will suggest the export policy revision during a cabinet meeting on Friday, the official said. The current export tax has not been changed since the 1970s.

"I think this will put us in a very much competitive position as the difference will be the same as Indonesia which has a 13.5 percent export tax," Bernard Dompok, the plantation industries and commodities minister, told reporters when asked about the proposed tax cut.

Analysts said the move could help support crude palm oil (CPO) prices.

"We believe the reduction in CPO export tax (if approved by the Cabinet) would help boost exports of CPO, hence reducing stockpiles and cushioning CPO price from falling further," said Malaysia's Hong Leong Investment Bank in a research note.

Palm oil suffered its biggest loss in nearly three years on Tuesday on the back of lacklustre shipments and growing stockpiles. It dropped 8.7 percent to 2,255 ringgit ($737) per tonne - its steepest daily drop since the 2008 financial crisis.