8/7/2002 (Asia Intelligence Wire) - Despite bullish prospects in thePhilippine palm oil industry, local palm oil producers are pushing forcontinued protection against cheap imported palm oil.Representatives of palm oil producers met with Department of Agriculture(DA) officials last week to lobby for the extension of the current 15%tariff rate slapped on imported palm oil. The current rate is set to bereduced by five percent next year.In a telephone interview with BusinessWorld, Agriculture assistantsecretary for policy and planning Segfredo R. Serrano said the DA hasendorsed the local palm oil industry's request to the Cabinet committee onTariff Related Matters (TRM)."They still want the high tariff to be extended until 2004. It wassupposed to be reduced this year but it was already extended to 2003. Wehave already endorsed their position to the TRM. It's now up to Malacanangto decide on the extension,"he said.Low tariffs for imported palm oil are expected to result in stiffercompetition against cheaper palm oil from Malaysia and Indonesia.On the other hand, keeping the tariff wall is also expected to give localvegetable oil producers sufficient protection from a current world glut ofvegetable oils which has been depressing international prices. The slidein prices is due to the significant rise in world palm oil production dueto favorable weather conditions.The Philippines remains a net importer of palm oil and needs to develop atleast 100,000 hectares of oil palm plantation within the next 10 years tobridge the gap in local supply and demand.The country imports approximately P1 billion worth of palm oil every yearto supply local demand, bulk of which comes from local food manufacturingcompanies. The commodity is used mostly as an ingredient for margarine,snack foods, instant noodles and infant formula.BusinessWorld earlier reported that current land area planted with oilpalm is pegged only at 18,000 hectares, way below the country'ssufficiency level. Data from the US Department of Agriculture also showedthat in 2000, the Philippines produced 46,000 tons of palm oil andimported 63,700 tons.

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