30/08/2012 (Manila Standard Today) - Palm oil producers are seeking government protection against the surge of undervalued imports that affected the prices of their production.

Sources said palm oil producers were planning to file for a special safeguard duty with the Trade Department, following the surge in palm olein, or palm oil imports, and the drastic drop in their prices.

“The palm growers association is poised to file for SSG on palm oil imports. They said that most of the imports were undervalued, thus, unfairly competing with the local product,” a source said.

Palm oil is used as household cooking oil and is a key ingredient in margarine, shortening, vegetable ghee, ice cream, confectionery and non-dairy creamers.  Hundreds of farmers in Caraga region depend on the palm oil industry.

Palm olein prices have consistently gone down since July 2011 when the price was around $1,630 per metric ton.  The price fell to $1,500 per MT in the early part of 2012 and is now barely above $1,000 per MT.

Local producers are seeking safeguards to temporarily deal with the sudden surge in imports.

The World Trade Organization provides that a special safeguard on agriculture can come in the form of higher duties that can be triggered automatically when import volumes rise above a certain ceiling, or if prices fall below a certain level.

Sources said the palm oil producers planned to file the case soon. “If the petition is sound and with basis, the Trade Department will issue safeguard duties, but this will be good for 200 days only. After that, the palm oil producers may now elevate the case to the Tariff Commission,” they said.

The Tariff Commission will then conduct a thorough review, before coming up with recommendations and consulting other concerned parties.

“All local cooking oil manufacturers are forced to import palm olein because they have to fight head on in the market,” a source said.

An independent study conducted by the coconut industry showed about 31 competing brands of palm olein in the Philippine market.

The coconut industry could not quantify how much of imported palm oil enters the country for lack of complete data from the Bureau of Customs.