08/02/2012 (Reuters) - EU palm oil imports will be steady in 2012 as the economic downturn offsets attractive prices, and more biodiesel producers are expected to go under, a head of the Dutch industry body told Reuters on Tuesday.

Frans Claassen, head of the Dutch Board for Margarine, Fats and Oils, said that demand in the European Union for palm oil is likely to remain around 5.5 million tonnes in 2012, the same as in 2011.

"Europe is still in the crisis. We are not at the bottom yet, and I expect stabilization (of palm oil demand) at maximum," he said in a phone interview.

The region's two biggest palm oil consumers - the biodiesel and food processing industries - are facing difficulties, Claassen said.

Food companies such as Unilever face higher raw materails costs and are raising prices and slashing other costs to compensate, he said.

Meanwhile, more plants in the EU biodiesel industry are likely to be shuttered this year due to high input costs, cheap rival imports and wavering political support in the face of doubts about its environmental credentials.

"We don't see any strong commitments of national governments to increase the biodiesel percentage. In addition, the production of first generation biodiesel plants is too low," Claassen said.

According to Hamburg-based analyst Oil World, the 27 EU member states in 2011 imported 5.5 million tonnes of palm oil, down from 5.8 million in 2010.

Imports to the Netherlands, which accounts for more than one third of total EU imports, dropped to 1.95 million tonnes in 2011 from 1.97 million in 2010. The majority of that palm oil was re-exported to Belgium and Germany.

At the same time, the price of palm oil has come down by 18 percent to $1,082 per tonne from $1,320 per tonne.

"Most of the decline is due to lower biodiesel production," Claassen said.

Since 1995, global palm oil production has more than tripled to 50 million tonnes. It is used more and more by food producers to make margarine and by biodiesel producers in biofuels production.

Claassen said that, in addition to the economic crisis, an export tax introduced by Indonesia, the world's largest producer, is a setback for importers.

"In the last years the industry invested a lot in refineries in Europe and in the Netherlands, and the export scheme is damaging," he said.

"It is about time that Indonesia and Europe discuss this issue and solve it," Claassen said.

The Board for Margarine, Oils and Fats, an umbrella industry body, has asked the Dutch government to lobby for the European Union to exempt sustainable palm oil used in food from an import tax in Europe.

"We have to convince people in Malaysia and Indonesia who have invested in sustainable palm oil that there is demand in Europe," he said.