15/10/2012 (Bernama) - India's premier vegetable oil association, The Solvent Extractors' Association of India (SEA) said the reduction in export duty for crude palm oil (CPO) would encourage more imports of the commodity from Malaysia.

"That is a good move, which will encourage more imports from Malaysia and reduce the high CPO stock there," its executive director, Dr B.V Mehta said.

Following the decline in palm oil prices since September this year and increase in domestic palm oil stock to 2.48 million tonnes last month, the Ministry of Plantation Industries and Commodities announced today that effective Jan 31, 2013, the CPO export tax rate will be between 4.5 per cent and 8.5 per cent, depending on the prevailing CPO price, and will be fixed on a monthly basis for Malaysia to stay competitive.

Currently, the export tax rate is 23 per cent.

Most of the CPO imports in India is from Indonesia and Malaysia was the market for RBD Palm olein, said Mehta.

"This move could change it. Indian (refineries) could now import more CPO from Malaysia as well as Indonesia," he told Bernama in a telephone interview, here Friday.

In August, India's CPO imports climbed 13 per cent to 620,192 tonnes in August, while refined palm oil purchases declined 2.7 per cent to 79,486 tonnes, the association announced recently.

Palm oil is the highest selling oil in India, accounting for 42 per cent of national consumption, especially in the "out-of-home" market segment.

India consumes about 16 million tonnes of edible oil annually and 54 per cent of this is imported.

Malaysia and Indonesia are the only two main suppliers of palm oil and they dominate 89 per cent of edible oil exports globally.

SEA was formed in 1963 to help and foster the development and growth of Solvent Extraction Industry in India.

At present, the association has 835 members including about 320 working solvent extraction plants having combined oilcake/oilseed processing annual capacity of about 23.2 million tonnes.