26 March, 2003 - MALAYSIA denies it will soon impose tax on exports ofcrude palm oil (CPO) to India as a retaliatory move against the latter’ssupport for soyabean oil.Primary Industries Minister Datuk Seri Dr Lim Keng Yaik said that Malaysiais in no position to slap such a tax and does not see the country gainingfrom such a move.“I never said Malaysia will retaliate by imposing tax. What I said wasMalaysia will make representations to India to address the discriminatoryduties that India imposes on palm oil compared to soyabean,” Dr Lim toldreporters in Bangi yesterday.Dr Lim was commenting on an India-based newspaper report last week, whichquoted him as saying that Malaysia would slap the duty if India continuedto impose a higher tariff on palm oil imports than for soyabean oil.“The report is far from the truth. I was merely explaining the situationon the discriminatory tariffs, but the issue was sensationalised by theforeign reporters at a press conference last week,” he said.The minister had earlier launched two seminars on Livestock and CropIntegration with Oil Palm and Progress of Porim Series One and TwoPlanting Materials and Release of Elite Germplasm to the Industry.India currently imposes a 65 per cent duty on CPO and a 45 per cent dutyon crude soyabean oil. Processed palm oil carries a duty of 92.4 per cent,and processed soya 50.8 per cent.Malaysia has been pushing for the subcontinent to lower the palm oil dutyto be at par with that for soyabean for the past three years.It is understood that India refuses to relent to Malaysia’s request as ithas to protect the interest of its edible oil farmers as well as to pleasethe soyabean oil producers who are mostly US-linked.Malaysia imposes a minimal export tax on CPO to all countries based on agraduated scale in tandem with current market prices. It can range from aslow as 7 per cent to a high of 30 per cent.However, Dr Lim said Malaysia may need to take another look at its policyon exporting CPO to India as well as other countries as it will affectMalaysian refiners and dampen downstream-related activities.“Malaysia will take another look at its strategies and synergies becausewe cannot go on exporting too much CPO to India and later on buy backprocessed palm oil products from India, which will make Malaysia alaughing stock.”He added that Malaysia will also discuss with Indonesia how it can worktogether to limit CPO exports and boost downstream activities.Dr Lim said to date, palm oil exports and shipping rates to West Asia havenot been affected by the US-Iraq war.“So far so good... my ministry is monitoring the situation on a dailybasis and I will let you know if there are any problems,” he said.India is the world’s largest consumer and buyer of the world’s edible oilswith a demand of 3.5 million tonnes a year, of which 50 per cent, or 1.7million tonnes, is supplied by Malaysia.India has been Malaysia’s biggest palm oil buyer for the past severalyears before it dropped to second spot last year, buying only 1.6 milliontonnes compared with two million tonnes in 2001.