28/05/2008 (The Economic Times), Kolkata - Amid the ongoing controversy over expansion in the area for palm oil plantation in Malaysia and Indonesia, allegedly at the cost of destruction of the environment, India wants both countries to take proactive steps to promote production and export of environment-friendly palm oils according to the criteria laid down by the world body Roundtable on Sustainable Palm Oil (RPSO), which works for the promotion of sustainable palm oils.
India’s message in this direction has been conveyed by the country’s leading edible oil industry body Solvent Extractors’ Association of India (SEA) at the World Palm Oil Summit and Exhibition - 2008, held recently in Jakarta. While participating in the summit, SEA has put forward one proposal each in this regard to Indonesia and Malaysia, the world’s two largest palm oil producers.
“Indonesia has been requested to reduce its export duty on RPSO-approved palm oils from the standard rate of 15% while Malaysia has been urged to keep out such oils from its overall export quota for palm oils, which is at present pegged at 1 million tonne per annum,” SEA executive director BV Mehta told ET.
India is interested in increase in the supply of sustainable palm oils for its own sake, said Mr Mehta. As the country largely depends on imports of palm oils from Indonesia and Malaysia to meet half of its domestic demand for cooking oil, in all fairness it does not want to see any dip in palm oil production even as there have been concerns raised by some environmentalists, who allege that following expansion of palm oil plantations, the habitat of the orangutan in Indonesia and Malaysia is getting wiped out, threatening extinction of the species.
SEA has indicated at the summit that riding on a 4% growth in edible oil consumption, India’s total demand for edible oils is expected to increase from the current level of 13 million tonne (mt) to 15.6 mt in 2010 and further to 21 mt by 2015. But if the per capita consumption growth turns out to be higher at 5% or 6%, demand will be much higher - 23 mt by 2010 and 25 mt by 2015.
In that case, the country’s edible oil imports may climb 38% by 2010, straining supplies, as rising incomes among the nation’s middle class consumers stoke demand for fried food. Eventually, edible oils imports may shoot up to at least 6.5 mt, up from 5.6 mt in 2007-08, according to SEA.
In the 2007-08 oil year (November-October), total edible oil imports are estimated to rise above 5 mt from 4.7 mt in the previous year. Though the difference in the landing prices between crude palm oil and crude soyabean oil has now reduced to $205 per tonne, it is still on the higher side. “Due to this, imports of palm oil are expected to rise in the coming months, which may finally touch 4 mt by the end of the current oil year,” said Mr Mehta.