MEDAN, July 15 Asia Pulse - China and India are expected to cut theirimports of crude palm oil (CPO) from major producers such as Indonesia andMalaysia in the next few months, chairman of the Indonesian Palm OilAssociation (Gapki) Derom Bangun said.

India which imported two million tons of CPO from Indonesia in 2003 isexpected to reduce its imports by 20 to 25 per cent, Derom said hereWednesday.

Likewise, China would also cut its imports from Indonesia - which totalled500,000 tons in 2003 - although the percentage would not be significant.

China's plan to reduce its CPO imports was a consequence of itsgovernment's policy to rein in the growth of the country's economy whichhad been overheating during the past three years.

India's decision to reduce its CPO imports was because its own CPOproduction had increased and its policy to raise import duty on RBD oleinfrom 70 per cent to 75 per cent.

The downturns in China's and India's CPO imports amid increasing worldproduction would depress the commodity's price in international markets,he said.

The CPO price cif Rotterdam in the second week of July declined toUS$407.5 a ton from US$425 per ton in the preceding week.

Derom said India had imposed a 60-percent duty on CPO imports containing aminimum of 500 parts per million (ppm) of beta carotene.

If the commodity contains less than 500 ppm of beta carotene, the Indiangovernment would consider it as having been purified to the same extent asRBD olein and thus subject to a 75-percent duty.

Derom said, India's policy would make it difficult for CPO with less than500 ppm of beta carotene to compete in the Indian market.

According to Derom, the reduction in India's and China's CPO imports hadhad a negative impact on the commodity's price in producing areas inIndonesia.

The CPO price in the domestic market had declined to Rp3,500 per kg fromRp4,000 per kg in early July.

The price of fresh palmoil fruit at farmer's level had also declined,namely from Rp850 to Rp600 per kg.

"However, I think India's and China's policies to reduce their CPO importswill not have a significant effect on Indonesia's CPO exports in 2004.However we have to work hard to find new markets," Derom said.

(ANTARA)