The Battle Between Indonesia, India and Malaysia
Tax policy is causing brouhaha in the palm oil trade. India has traditionally favored its palm oil refiners by imposing a 7.5 percent tariff on refined oil imports. However, now the largest exporter of palm oil, Indonesia, has raised its export tax on crude oil while lowering it on refined oil. As a result, India's imports of refined palm oil have risen, and so too has the blood pressure of India's refiners. Closely watching this battle is Malaysia, the second-largest exporter of palm oil, and several countries which also are major palm oil importers, including China. Just to keep it more interesting, Indonesia actually has a variable export tax, presumably to ensure adequate supplies for domestic consumers.