29/09/2009 (Daily Times), Karachi - Country’s palm oil products import bill for September-October 2009 will increase by around 10 percent on higher demand and rupee-dollar parity, importers said Monday.

“We imported around 227,875 metric tonne palm oil products during July-August 2009 for around $166.53 million”, a senior member of Pakistan Vegetable Oil Mills Association (PVOMA), Nasir Ibrahim said.

He said palm oil prices would rise as shortage in the world’s cheapest edible oil is harder to remedy than the current shortage of soyabeans.

Malaysia, the second-largest producer of palm oil is likely to miss the 2009 production forecast after rains affected pollination in the eastern state of Sabah, which accounts for more than one-quarter of the country’s output.

Nasir said the country’s demand for palm oil usually increases by around 6 percent during October-January every year on higher demand due to cold weather and increase in use of palm oil products.

The international price of RBD reached $780 per metric tonne while the price of palm oil touched around $800 per metric tonne.

He asked the government to rationalise the customs duty and other taxes on imported edible oil.

He said due to higher import cost, the manufacturers of vegetable ghee and cooking oil were unable to pass on the maximum benefit in case of any slight decline as they were facing multiple problems including power and gas loadshedding and production loss.

He said the ITP duty should be increased or decreased in proportion to the changes in the price of imported edible oils in the international market.

Ibrahim said the rates of sales tax levied at 16 percent and withholding and FED tax charged at the rate of 2 percent on the imported palm oil should also be lessen.

Presently, he said the total duties and taxes paid by vanaspati manufacturers were around Rs 28,500 per tonne.

The PVMA proposes the government to fix the FED on imported edible oils at the level of C&F prices of RBD palm olein as July 2006.

“The impact of increase around $100 per metric tonne in international price of palm oil products has affected the local prices of oil and ghee”, Ibrahim said.

Imports are made under Malaysian Palm Oil Concessionary Trade Agreement (MPOCTA), like free-trade agreement (FTA), he added.

Pakistan imports mostly Malaysian palm oil and olein to meet domestic demand of 2.01 million tonnes, as locally produced cottonseed meets around 0.59 million tonnes of the demand. Edible oil import costs more than $1.1 billion.