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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

23/03/2005

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

The Jakarta Post,Jak

CATEGORY

HEADLINE

India keeps high palm oil tariff despite RI protes
The Jakarta Post - Mar 21 6:36 PM - India will maintain its higher importduty on crude palm oil (CPO) despite complaints from Indonesia, IndonesianMinister of Agriculture Anton Apriyantono said on Monday.

Anton was in New Delhi last week where he met with his Indian counterpart.

"India says that the decision is final as it is aimed at protecting localmanufacturers of edible oils," said Anton on Monday.However, India promised to review the import duty periodically in responseto global CPO price fluctuations, Anton said, adding that India wascommitted to maintaining the level of its CPO imports from Indonesia.

Anton met with India's agriculture minister, commerce and industryminister, and finance minister on the sidelines of last week's ministerialmeeting in New Delhi of the G20 -- a group of developing countries set upto defend the interests of the developing world at the World TradeOrganization.

The Indian government recently raised its CPO import duty from 65 percentto 80 percent to protect its farmers who grow soybeans and sunflowers,which yield edible oil that is a substitute for CPO.

This was followed by a move to increase India's import duty on olein, aCPO derivative product, from 75 percent to 90 percent.

Indonesia is the world's second largest exporter after Malaysia of palmoil -- a raw material for, among other things, cooking oil, soaps anddetergents.

Output from the two countries is expected to make up about 85 percent ofthis year's global palm oil production.

Before India moved to raise the import duty on CPO, Indonesia had hoped toincrease its palm oil exports to the country.

Earlier, Indonesian Palm Oil Producers Association chairman Derom Bangunsaid the association expected to increase CPO exports to India to 1.2million tons this year from last year's 960,000 tons.

Local palm oil industries suggested the move by India could benefitMalaysia, which exports more palm oil derivatives than crude palm oil --the complete opposite of Indonesia.

However, minister Anton denied this was true, saying that crude palm oildominated Malaysia's palm oil exports to India last year, making up almost64 percent of the exports, compared to Indonesia's 73 percent.

"There is not much of a difference," he said quoting data from the Indianfinance ministry.

In total, Indonesian CPO imports account for about two thirds of India'stotal CPO imports, with Malaysia supplying the rest.

During his meetings in New Delhi last week, Anton said he proposed acooperation in building CPO depots in several Indian states to boost CPOexports to the country.

India has yet to respond to the offer. India however, has offered bothIndonesia and Malaysia the chance to hold bilateral preferential tradetalks -- something India has done with Thailand, Malaysia and Singapore.

Anton said the offer would be forwarded to Minister of Trade Mari E.Pangestu for consideration.