KUALA LUMPUR - Malaysia will defer the imposition of an export duty on crude palm oil to Dec. 31, the primary industries minister said in a report on Wednesday, in a bid to boost palm oil exports and expand into new markets.

Palm oil stockpiles in Malaysia, the world's second-largest producer, climbed to the highest in at least 19 years in December, a situation made worse by a European Union move to cut out its use after the European Commission determined that palm oil cultivation has resulted in excessive deforestation.

The deferment means the export duty on Malaysian palm oil will remain at zero percent, minister Teresa Kok said, according to a report by national newswire Bernama.

"The ministry encourages producers and exporters to use this opportunity to export more palm oil. This will also benefit oil palm smallholders," Kok said.

(Reporting by Joseph Sipalan; Editing by Kim Coghill) ((Joseph.Sipalan@thomsonreuters.com; +60323338019; Reuters Messaging: joseph.sipalan.thomsonreuters.com@reuters.net))