Centre unlikely to lower palm oil import tariff
NEW DELHI, 24 April 2000, (Economic Times) - INDONESIAN and Malaysianindustry ministers will lobby India for lower duty on palm oil duringtheir visit starting Monday but the world’s largest oil importer isunlikely to oblige, industry officials said.
Indonesia’s trade and industry minister Luhut Pandjaitan and Malaysianprimary industries minister Lim Keng Yaik would hold meetings with India’sfinance, commerce and food ministries to seek duty at par with soya oil.
Malaysia and Indonesia, the world’s number one and two palm oil producersrespectively and traditional rivals, agreed in February to form a worldpalm oil association to help lift palm oil prices from 10-year lows.
``We do not expect any cut in duties because the prices are too low, andany fall in import duty will hit farmers and the domestic oil industry,’’a leading trader said.
The Union budget, in February, has imposed a steep import duty of 75 percent on crude palm oil and 85 per cent on refined palm oil.
The duties compare to 45 per cent for crude soya oil and 50.8 per cent onrefined soya oil, driving buyers to switch to soya oil.
Indian traders said CPO and refined palm oil prices have fallen in thelast one month and any reduction would be ``suicidal for the localindustry’’.
``The CPO is down to $203 a tonne and refined oil has also fallen. We donot see the import tariff coming down,’’ a leading oil importer said fromAhmedabad.
``We rather want the government to increase duty on soya oil as asafeguard measure so that its import does not hurt prices,’’ B B Mehta,executive director of Solvent Extractors Association of India , said.
Analysts said India might consider a small reduction in palm oil duties ifthere are possibilities of counter trade of rice.
``We have huge stocks of rice and Indonesia has a demand of two milliontonnes and if they agree to buy our rice then the government mightconsider their case,’’ a Mumbai-based commodity analyst said.
Meanwhile, state-run agencies a had planned to export about 2 milliontonnes of rice from government stocks, which were at 20.7 million tonnesin January this year.
But traders have a doubt over the move and say the country was not likelyto meet its target due to lower global prices. (Reuters)