GATT impact on palm oil

GATT impact on palm oil

KUALA LUMPUR (AFP): Malaysia's primary industries minister Saturday warned the country's palm oil producers that recent General Agreement of Tariffs and Trade (GATT) decisions to liberalize trade would result in fiercer competition.

"GATT presents both opportunities and threats to Malaysian palm oil," said Lim Keng Yaik at an annual meeting of the Malaysian Palm Oil Promotion Council (MPOPC) in northern Penang state.

Lim said the removal of subsidies stemming from the Uruguay Round of GATT talks would increase the cost of producing other oils relative to palm oil, which is generally produced without government subsidy.

GATT has stipulated that developing countries cut subsidized exports by 14 percent before the year 2005.

But the minister said this would also encourage other countries to begin producing palm oil, increasing competition.

"In this regard, our neighbor Indonesia looms prominent. Other countries in Africa, Latin America and the ASEAN region are also seriously considering venturing into the palm oil business," said Lim.