KUCHING: Analysts believe the move by the French Parliament approved a bill that would raise the import tax of palm oil from 100 euros (RM460) per metric tonne (mt) up to 900 euros (RM4,140) per mt – will be negligible for Malaysian plantations for the time being.
This follows an unsuccessful similar move three years ago by the French government, which was known as “Nutella Tax”.
The French senator had proposed a 300 per cent tax hike on palm oil on the ground that its production harms the environment and its consumption fuels obesity. Nevertheless, the proposal was subsequently rejected during the French national assembly.
“Though France made up only about 0.06 per cent of our palm oil exports in 2015, it could serve as a precedent for the rest of European countries, who are the heavy producers of soya, rapeseed and sunflower oils,” foreewarned the research team at Public Investment Bank Bhd (PublicInvest Research) in a note yesterday.
“As we see negligible impact to Malaysian palm oil exports for the moment, we maintain our overweight on plantation sector.”
PublicInvest Research pegged the import tax jump as “ridiculously high” as it even far exceeds the current palm oil price of RM2,378 per mt.
“Though France’s palm oil imports from Malaysia is relatively small in terms of quantity, we see a threat from the European region as it could set as a precedent for the rest of European countries, who are the heavy producers of soybean, rapeseed and sunflower oils.
“France only contributed less than 1one per centof our palm oil exports market but the European Union market accounted for more than 14 per cent,” it added. “This could further hurt Malaysian palm oil exports, which are already facing stiff competition from Indonesian counterparts.”