Export tax suspension to increase FGV exports significantly, says Zakaria

PETALING JAYA: The government's decision to suspend the crude palm oil (CPO) export tax for three months is expected to benefit plantation companies with significant upstream operations and strengthen the commodity prices for the first quarter of this year, according to Felda Global Ventures Holdings Bhd (FGV).
In a statement today, FGV group president and CEO Datuk Zakaria Arshad said industry players are facing with issues of high CPO stocks level and strengthening of the ringgit that have pressured the CPO price to around RM2,500 per metric ton (MT).
"The government's action to implement the export tax suspension is timely and an effective way to reduce CPO stocks level that coincides with the increasing demand from China for the upcoming Chinese New Year.
"With this development, we expect a 30%-50% increase in the export volume to major importing countries like India, Pakistan, China and Europe," he added.
Zakaria said this shall also enable the group to increase supply to its joint-venture refinery in Pakistan at a more competitive pricing.
Based on this situation, he said the group expects average CPO prices for the first quarter 2018 to improve slightly by trading around RM2,650 per MT to RM2,750 per MT.
Commenting on the overall 2017 performance, Zakaria said FGV's core business operations had performed well with positive growth on fresh fruit bunches (FFB) production compared to 2016.
"As for 2018, we remain committed in delivering the Strategic Plan 2020 (SP20) through better core business performance, stronger financial position, enhance governance in all sectors and high performance culture that will deliver sustainable value to our shareholders," he added