NEW DELHI: India will consider reviewing its high import duty on Malaysian crude palm oil (CPO), Prime Minister Datuk Seri Najib Razak said.
In November 2017, the Indian government doubled the import duty on Malaysian CPO to 30 per cent from 15 per cent previously, in order to support its local refiners.
"The palm oil import duty increase was somewhat higher than that of any other vegetable oils, so I want it to be looked into again by the Indian government.
“Prime Minister Narendra Modi said he will give serious consideration to the request,” he told the Malaysian media, here, today.
Najib, who is also Finance Minister, said the import duty increase had an impact on the purchase of palm oil because last year India emerged as Malaysia’s largest buyer.
In November, India had also increased the import tax on soya oil and sunflower oil to 30 per cent and 25 per cent from 17.5 per cent and 12.5 per cent, respectively.
According to the most recent United Nations data, India's 2018 population is estimated at 1.35 billion. India imports about 14.5 million tonnes of vegetable oil from Malaysia and Indonesia annually to meet its burgeoning domestic demand for edible oils.
Indonesia and Malaysia together account for 85 per cent of the world’s CPO output and 91 per cent to palm oil exports.
In an immediate reaction, Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong thanked Najib for conveying Malaysia’s concern to Modi during his visit to India.
“Najib has always focused on ensuring smallholders get a stable and good price for their agricultural produce. India is one of Malaysia’s palm oil biggest export destination. Any action by India will affect Malaysia’s export volume, and subsequently it will affect our palm oil stockpile," Mah said.
Malaysian Palm Oil Association chief executive officer Datuk Mohamad Nageeb Wahab, meanwhile, said export volumes had dropped since the tariffs were increased in November.
“India is one of Malaysia's biggest buyers of palm oil. We laud India’s consideration to reduce tariffs on palm oil. If the tariffs are lowered significantly, it will definitely make palm oil more competitive than other types of imported vegetable oils for Indian traders," he said.