Search the Internet          Tips  Sites: Finance, Investment

Malaysia says up to India to decide palmoil duty

Malaysia said on Saturday it will leave it to the Indian government to decide whether to reduce its high import duties on palm oil.

Primary industries minister Lim Keng Yaik said enough has been said about the issue and the Malaysian government should not be seen as applying pressure on India.

"The matter has been brought up at all levels during the Indian prime minister's visit to Malaysia.

"So, we should say no more. We will leave it to the Indian government based on its goodwill," Lim was quoted as saying by the official Bernama news agency.

Indian Prime Minister Atal Bihari Vajpayee told his Malaysian hosts during his visit to Kuala Lumpur last week that New Delhi will review its high palm oil import duties.

India, the world's biggest edible oil buyer, has faced big pressure from Malaysia and Indonesia, the world's biggest palm oil producers, to reduce duties.

In February, India slapped its heaviest-ever import duty of 75 per cent on crude palm oil and 85 per cent on refined palm oil. But it kept its duty on soyoil, palm oil's main competitor, at 45 per cent due to World Trade Organisation commitments.

Malaysia argues that the duty imbalance puts palm oil at a disadvantage to soyoil. India says it is only protecting its own oil producers from cheap imports, adding that the advantage gained by soyoil could not be helped because of the country's commitment to the WTO.

India bought 2.03 million tonnes of palm oil from Malaysia in 2000 and Kuala Lumpur fears the quantity could be much lower this year if the tax advantage enjoyed by soyoil continues.

During Vajpayee's visit, Malaysia and India signed a deal whereby New Delhi would accept palm oil as payment for carrying out a $1.5 billion railway project in Malaysia over five years.

Lim stressed that the award of the project to India was not conditional on the palm oil duty issue.

Tell us what you think of this report