India’s decision to halve import duties on crude palm oil (CPO) could support demand for Malaysian palm oil and provide some relief to plantation companies, although stronger competition from sunflower oil may limit the upside, according to CIMB Securities.
In its latest plantation sector report, CIMB said India reduced the basic import duty on CPO to 5% from 10%, effective Sept 24, as the country seeks to ease domestic edible oil prices ahead of its September-to-November festive season.
India also cut the duty on crude soybean oil to 5% and eliminated the 10% duty on crude sunflower oil.
The changes are particularly relevant to Malaysia, with India accounting for approximately 17% of Malaysia’s palm oil export volume in 2025, making it an important market for the country’s plantation industry.
Higher CPO Prices Could Benefit Malaysian Planters
CIMB said lower import duties should reduce the landed cost of CPO in India, potentially encouraging higher palm oil consumption and imports.
However, the research house cautioned that the larger duty reduction for sunflower oil could improve its competitiveness against palm oil, limiting any significant shift in Indian demand towards CPO.
Before the announcement, CPO was already trading at a price advantage in the Indian market. As at Sept 18, its landed price stood at approximately US$1,265 per tonne, compared with US$1,314 for soybean oil and US$1,380 for sunflower oil.
CIMB expects the benefits for Malaysian plantation companies to come primarily through firmer CPO prices rather than a substantial increase in export volumes.
Upstream producers such as Johor Plantations Group, Genting Plantations, Hap Seng Plantations, Ta Ann Holdings and United Malacca have greater earnings sensitivity to higher CPO prices.
Integrated plantation groups, including SD Guthrie, IOI Corporation and Kuala Lumpur Kepong, could also benefit from stronger upstream margins.
Crude Palm Oil Retains Advantage Over Refined Products
CIMB noted that India has maintained a sizeable import duty differential between crude and refined palm oil, which continues to favour CPO imports for processing by Indian refiners.
The basic import duty on refined palm oil was reduced to 27.5% from 32.5%, compared with the new 5% duty on CPO.
As a result, CIMB expects the impact on Malaysian downstream refiners to remain broadly neutral.
The research house maintained its CPO price forecasts at RM4,450 per tonne for 2026 and RM4,550 for 2027, alongside its Overweight rating on the Malaysian plantation sector.
