7/1/2004 THE STAR (MALAYSIA) - Malaysian Palm Oil Association has askedthe palm oil refiners in Malaysia to consolidate their businesses toovercome the threat of intense competition from major palm oil importingcountries. Malaysia, which has 47 palm oil refiners, needs to consolidateits palm oil business to build a solid group both in terms of volume andfinancial standing.

Of late, many of the importing countries have levied tariffs on imports ofrefined palm oil, in order to promote local refining activities. Theeffective protection rates levied are $90/tonne in Bangladesh, $34/tonnein India and $25/tonne in Pakistan; over $29/tonne in European Union; over$5/tonne in Egypt; and 50 cts/tonne in China. As of now, there is noeffective protection for Japanese palm oil refiners. The protection ratesimposed by these importing countries has lead to a tug-of-war between thepalm oil importers and exporters.

Further, the changing consumer behaviour in importing countries for betterquality standards, has forced exporters to re-refine refined oils and shipit under special and expensive conditions like nitrogen blanketing toavoid deterioration.