25/09/2010 (The Hindu Business Line) - The Malaysian Government will continue promoting export of refined palm oil to support its refiners. While India allows duty-free imports of crude vegetable oil, a Customs duty of 7.5 per cent is levied on refined oils.

Malaysia has an installed capacity to refine 19 million tonnes of crude palm oil, but it produces 17 mt crude palm oil (CPO) and exports three mt CPO annually, leaving just 14 mt for its edible oil refiners.

Speaking to the media on the sidelines of the 14th international conference and exhibition ‘Globoil India 2010', Mr Bernard Dompok, Malaysian Minister of Plantation Industries and Commodities, said the country will discuss various bilateral trade issues, including export of refined palm oil, with the Prime Minister, Dr Manmohan Singh, who is to visit Malaysia next month.

India is slated to import 90 lakh tonnes of vegetable oil this fiscal, with palm oil accounting for 65 lakh tonnes. Malaysia will account for 20 per cent of India's palm oil imports. Last fiscal, the country imported 86 lakh tonnes of vegetable oil with palm accounting for 70 lakh tonnes.

The bilateral trade between the two countries was valued at $7.1 billion in 2009, with India's exports to Malaysia at $2.3 billion and imports at $4.8 billion. Between January-July, 2010 trade between India and Malaysia was recorded at $4.9 billion, an increase of 26.6 per cent compared to the same period last year, said Mr Dompok.

On the long-standing demand on supply of Malaysian palm seedling to India, Mr Dompok said exports of seedlings were not possible as they themselves are facing a huge shortage after the Government decision to replace some of the old plantations.

Mission to double yield

With the growth of new plantations in Malaysia constrained by availability of suitable land for sustainable cultivation, Mr Dompok said the country has embarked on mission to double the yield to eight tonnes. India's edible oil output in the crop year starting November is estimated to increase by about 6.2 lakh tonnes due to higher production of groundnut and soyabean oil, according to the Solvent Extractors' Association (SEA) latest projection.

Oilseed production in the crop year starting November is projected to touch about 235 lakh tonnes (205 lakh tonnes). The prospects of rabi crop also look bright due to good monsoon and higher area under oilseed coverage, SEA said. In last 10 months, the country has imported about 74 lakh tonnes and another 15 lakh tonnes expected in two months, SEA said.

Despite a bumper oilseed production, the country might import 93 lakh tonnes of edible oil due to higher per capita consumption and population growth. Consumption of edible oil is forecast to increase by about 4.4 per cent on the back of increase in per-capita consumption to 12.75 kg this fiscal as against 12.21 kg in 2009-10.