Quota hits Malaysia palm oil exports

Quota hits Malaysia palm oil exports

KUALA LUMPUR (AFP): Malaysian palm oil exports to China have been badly affected by the Chinese government's imposition of quotas and discriminatory import taxes on the commodity, a cabinet minister said Saturday.

Primary Industries Minister Lim Keng Yaik said Beijing could have been pressured by Washington to increase soya bean oil imports and reduce palm oil purchases to correct China-U.S. trade imbalance.

Lim said that since July, China had centralized the import of palm oil with quotas imposed.

"The import tax on palm oil is also discriminatory as it is 20 percent compared with 13 percent for soya bean oil and seven percent for groundnut oil," Lim said.

Lim was quoted by New Straits Times daily Saturday as saying that many Malaysian-Chinese joint-venture factories set up in China were unable to obtain the commodity freely because of the Chinese government's curbs.

He could not yet say by how much the imports had declined, but estimated the shortfall to be in the hundreds of thousands of tons worth millions of dollars. The final figure would only be known at the end of the year, he said.

China imported 1.4 million tons of palm oil last year, 90 percent of it from Malaysia, the world's largest palm oil producer.

Lim said Malaysian palm oil prices had been bullish for the past four years since China started importing the commodity.

Consistent purchases from India and Pakistan, and strong local support, have helped keep prices at the current strong levels, officials said.

Crude palm oil prices currently average 1,422 ringgit (US$568.8) per ton, from a nine-year high of 1,7800 in December last year and an average of 1,000 ringgit in 1993.

Malaysia contributed 53 percent of the world's total production and 64 percent of total exports in 1994 with an output of 7.22 million tons. Output is projected to rise eight percent to 7.8 million tons this year.