Malaysia cuts export tax and suspends expansion of palm tree plantings

Malaysia has reduced the export duty on crude palm oil in January 2026 from 10% to 9.5%, according to the Malaysian Palm Oil Board (MPOB).

The board notes that the reference price for palm oil in January was reduced to 3,946.17 ringgit (US$965.19) per tonne, down from 4,206.38 ringgit per tonne in December.

As a reminder, palm oil export duties in Malaysia range from 3% to 10%. The minimum rate is set when prices are between 2,250 and 2,400 ringgit per tonne. The maximum rate is set when prices exceed 4,050 ringgit per tonne.

Plantations and Commodities Minister Datuk Seri Johari Abdul Ghani stated that Malaysia will maintain its zero-plantation expansion policy for oil palm, focusing instead on productivity improvements and science-based development to support the long-term sustainability of the industry and export revenues.

Johari noted that palm oil prices remain stably high, exceeding RM4,000 per tonne, compared to RM1,800-RM2,000 per tonne in previous years, reflecting higher demand driven by expanding industrial and non-food applications.

Earlier, Malaysia’s palm oil exports fell by 16% in December, indicating a significant weakening in demand and rising inventories, which have risen for the sixth consecutive month, increasing 13% month-on-month to 2.84 million tonnes. Analysts expect the country’s palm oil production to reach 20 million tonnes for the first time next year.

Tags: export, prices, Malaysia, palm oil