KUALA LUMPUR, March 18 (Bernama) -- Primary Industries Minister Datuk SeriDr Lim Keng Yaik said that the government is considering restructuring orwithdrawing the duty free policy on all exports of processed palm oilproducts to India.He said that this might be done as a result of India's policy in notreducing import duty on crude palm oil (CPO) which was announced in itsBudget at the end of February.

"This is not fair. How can you have such a big differential (in importtariff) between CPO and soya oil and prossessed palm oil and prossessedsoya oil. I have already told India I can't keep on supplying crude palmoil when the tariff diferrential between crude and prossessed palm oil isso high," he said.

He said this at a press conference after officiating the MalaysiaDerivatives Exchange (MDEX) Annual Palm & Lauric Oils Conference &Exhibition : Price Outlook 2003/2004, here Tuesday.

India, the world's largest importer of edible oils, imposes a 65 percenttax on CPO and a maximum of 92.4 percent on refined, bleached anddeodorised palm olein against only 45 percent for soya oil and 50.8percent for prossessed soya oil.

In his speech, Dr Lim said that since 1999, crude palm oil exports havebeen liberalised on limited basis, thus providing new market opportunitiesin overseas markets.

India has been a major beneficiary of this new export policy shift withhigher imports of CPO and crude palm olein, he said.

"However, I wish to caution here that our ability to continue to exportcrude palm oil in the long run will depend on the supply/demand situationand the need to meet the CPO requirement of the huge refining sector inMalaysia it self," he said.

At the press conference, Dr Lim denied that India had boycotted Malaysia'sCPO.

Nearly two-thirds of India's annual edible oil imports of 4.5 milliontonnes came from CPO and crude palm olein from Malaysia and Indonesia.

Dr Lim visited India last month to urge the Indian government to reducethe differential tariff on palm oil imports in order to help it competewith local soyabean oil producers.

"When I gave in on tax free crude palm oil to India, it was a result ofthe demand of the Vanaspati Manufacturer's Association (a CPO industrybody) which was far away in the inland and unable to compete -- so weallowed them to have crude palm oil," he said.

However he said that the situation in India has changed wheremultinational companies were building up big refining capacities in India.He said that the only reason India had imposed those tariffs were becausethe exporters were "under declaring" and India wanted to fix the CPO priceto be in tune with international prices.

Dr Lim said the Indian consumers were consuming palm oil at double theprice of consumers in Europe.

He also said that if the Indian government wanted to encourage theirfarmers to produce more soya oil for imports substitution than they shouldraise the tariff of soyabean instead of palm oil.

-- BERNAMA