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.