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.