20 May 2002 (Business Times) - PALM oil, whose prices are improving oflate, is now less popular in India where the vegetable oil is slapped witha higher duty than arch-rival soyabean oil.

Malaysian Palm Oil Association chief executive MR Chandran said theunlevelled playing field in India has resulted in sluggish palm oildemands.

“Soyabean, which is slapped with a lower import duty than palm oil, ishaving the upperhand at present,” Chandran told Business Times in KualaLumpur yesterday.

“From January to April this year, India only bought 540,913 tonnes, whichis a 32 per cent drop compared with 796,499 tonnes during the same periodlast year,” said Chandran.

India, a traditional and the biggest buyer of Malaysia’s palm oil lastyear at 2.03 million tonnes, currently slaps a 65 per cent duty on crudepalm oil imports and a 45 per cent duty on soyabean.

The difference in duty is caused partly by India’s obligations to theWorld Trade Organisation, which sadly does not apply to palm oil.

Malaysia and Indonesia have lobbied hard for the import duty on palm oilto be reduced to a level on par with soyabean.

But it is understood that India is sticking firm to the current dutystructure to encourage domestic refining activities of its homegrownvegetable oils such as cotton seed and mustard oils.

Due to the current supply crunch of the world’s 17 edible oils and fats,palm oil included, soyabean has now become cheaper than palm oil.

Soyabean price averaged US$354 (US$1 = RM3.80) last year while palm oilaveraged at US$308.

“The association is happy that palm oil prices stay at current levels andshould not be above RM1,300 a tonne as it will be too expensive and buyerswill go for cheaper oils,” said Chandran.

(The informations and opinions expressed in this article represent theviews of the author only. They should not be seen as necessarilyreflecting the views of Palm News)