India Expects To Buy More Palm Oil From Malaysia.

KUALA LUMPUR: India sees continued demand for Malaysian palm oil this year, given the current shortage of edible oils in the country, said India Commerce and Industry Minister Anand Sharma.

India, the world's largest importer of vegetable oils, bought about 8.82 million tonnes of edible oils such as palm oil, soy oil and sunflower oil during the November 2009-October 2010 crop year.

“I expect India's annual demand for Malaysian palm oil to continue to grow,” Sharma said at a briefing for selected media here after signing the Malaysia-India Comprehensive Economic Cooperation Agreement (CECA) in Putrajaya yesterday.

India traditionally imports more than half of its total edible oil requirement of about 15 million tonnes annually. These include palm oil from Malaysia and Indonesia as well as soybean from South America.

According to Malaysian Palm Oil Board statistics, the country's palm oil exports to India stood at 1.16 million tonnes in 2010 compared with 1.35 million tonnes in 2009.

India is also expected to bind the tariffs on refined palm oil and three related products at 45% by the end of 2018.

According to Sharma, the Malaysia-India CECA is a free trade agreement which covers trade in goods and services and investment, as well as economic cooperation.

Two days ago, India signed a Comprehensive Economic Partnership Agreement with Japan.

Sharma said there was a need for stronger integration and strategic partnerships among the global nations, given the major shift in the dynamics of the global economic stability.

Within the next two years or less, he expects gross domestic products (GDP) of the European Union, the United States and Asia to be of equal size, contributing about 25% each to global GDP.

Earlier, Sharma was quoted by Reuters as saying that import duties on refined edible oils were “very fair”, playing down expectations the government would scrap the tax in its annual budget due next week.

He said lowering of import taxes on edible oils was not necessary to curb food price-driven inflation, which has risen to high double digits in annual terms.

“We don't have a situation where duties can be considered responsible for inflation,” he added.

India has kept taxes for refined vegetable oils at 7.5% compared with zero duty for crude variants to protect its domestic refining industry.

According to industry experts, prices of edible oils in India have gone up significantly from last year and may continue to remain high in the next few months.

Globally, prices of edible oils have increased by 15% in the last one year, making imports costlier for India.

Source : biz.thestar.com.my