* Importers have to pay Rs 20 per kg more

17/10/2007 (Daily Times Pakistan), KARACHI - The cost of imports of palm olien increased around 5 percent as the international prices of palm oil surged $45 per tonne to $890 per tonne, after a new all time high world’s record a day earlier, importers and millers said on Wednesday.

Importers would have to pay another Rs 20 per kilogramme as Malaysian crude palm oil futures surged to hit a new high on increase in exports and low yield of other oil seeds.

Exports of Malaysian palm oil products for October 1 to 15 increased 7 percent to 682,750 tonnes on a month earlier, a senior member of Pakistan Vegetable Manufacturers Association (PVMA), Nasir Ibrahim said.

“We are presently paying around Rs 12,900 a tonne cost and freight more in the shape of duties to the government on imports of palm oil than in 1997,” he said. “The extractors and ghee manufacturers will also adjust the prices of products as they will also pay more for the raw material.”

The prices of vegetable oil and ghee will increase around 5 to 8 percent, he added.

Pakistan imported around $891 million worth of palm oil during July-June 2007 as against $717 million in the same period last year.

He said the imports increased around 10 percent this year despite higher international prices of the commodity and lower than expected yields of cottonseed in the country.

Pakistan imported around 1.99 million tonnes of edible oil from Malaysia last year, included 35 percent of crude oil in 2006.

He said oil imports would further increase as the local market was up and would remain bullish while the production estimates of rapeseed, soyabean and sunflower remained below expectations. “We can expect importers will import a higher quantity in coming months”.

Importers have to pay around 45 percent duty on import value besides paying 50 percent import landing tax etc to the government, Mr Ibrahim added.

He said the palm oil market would not drop significantly as exports remain robust and palm oil was still at a discount level as compared to crude oil and other vegetable oils, as a result the demand is going to be strong.

The local market is up and would remain bullish so we can expect, importers to cash on the situation and import a higher quantity in coming months.

The country consumes around 1.9 million tonnes edible oil every year out of which 0.59 million tonnes is contributed by the local growers while the remaining is imported to bridge the demand and supply gap.

Malaysia’s exports are picking up on strong demand from the world’s top buyers, particularly China and India.