04/01/2008 (Daily Times, Pakistan), Karachi - The reduction of ten percent import duty on palm oil from Malaysia will not significantly affect the domestic price of vegetable oil in the country, the importers and dealers said on Thursday.

“The domestic vegetable oil prices will only be decline by Rs 1 per litre as 75 percent of the commodity is imported from Indonesia” Pakistan Vegetable Manufacturers Asso-ciation (PVMA) said. Nasir Ibrahim, a senior member of PVMA said importers has been paying duty of Rs 8,960 per metric tonne on imports of palm oil and after FTA, they would have to pay Rs 8,145 per metric tonne.

He hoped that import duty would further decline by 5 percent by 2010, however the international palm oil price would also touch $1000 per metric tonne in near future. He said imports would increase by around 20 percent in coming two months on the back of growing domestic demand and consumption due to decline in temperature in the country.

As the international prices of palm oil surged around $76 per tonne to $953 to $955 per tonne, the importers and millers paid additional Rs 27 per kg as Malaysian crude palm oil futures surged on increased international demand in exports.

During the last one year its price has increased from $400 to $945 PMT. It is likely to reach $ 1000 in next couple of months. There will, however, be no reduction on the rates of sales tax and federal excise duty levied at 15 percent and withholding tax charged at the rate of 2 percent on the imported palm oil. Pakistan reduces tariff on palm oil by 10 percent MOP on January 1, 2008 under Malaysia and Pakistan’s free-trade agreement (FTA) to boost Malaysian palm-oil exports. staff report