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India's palm oil imports seen slightly up

KUALA LUMPUR: India's palm oil imports were expected to increase to 3.26 million tonnes in 1999/2000 (November-October) from 3.1 million tonnes in the previous year, an industry official said at the weekend.

Dorab Mistry, a director at Godrej International Ltd, told a palm and lauric oil conference in Malaysia's capital that the import estimates included 500,000 tonnes of crude palm oil, which is now allowed to be imported.

"Palm will increase its share of India's imports from 65 percent to 77 percent," he said.

But the market share would diminish if the FOB price of RBD palm olein did not remain equal to or $10 below the price of crude soybean oil, Mistry said.

He expects a strong competition between palm and soft oils from May onwards to capture market share in India.

He noted that palm olein suffers an import duty disadvantage of 15.5 percent compared with crude soft oils, and the fact that India's refining industry has large surplus capacity of over three million tonnes.

"From May-June it will be an uphill struggle for RBD olein to hold on to its Indian market share. The possibility of higher import duties at any time is a sword hanging over the price level of olein," he said.

In December, India raised the import duty on refined edible oils to 27.5 percent from 16.5 percent. But it left the duty on crude edible oil unchanged at 16.5 percent.

Last month it announced that a special additional duty of four percent would be applicable on palm oil imports.

Mistry said the import duty could be raised further to 50 or 60 percent if the domestic situation warranted.

He also said that Pakistan might import less than one million tonnes of palm oil this year due to rising imports of oilseeds for crushing.

Pakistan imported 1.03 million tonnes of palm oil from Malaysia in 1999.-Reuters