Malaysia will not, for now, take the issue of negative labelling of palm oil products by France to the World Trade Organisation.

The Malaysian Minister for Plantation and Commodities Bernard Dompok told a press conference here on Monday that the two countries had decided to set up a joint working group to look at the issues involved in France labelling its food products as palm oil-free.

He was speaking after the inauguration of the Palm Oil Trade Fair and Seminar 2012 here, organized by the Malaysian Palm Oil Council.

“We are alarmed” about the things that were being done, said the minister about France’s move, triggered by allegations of destruction of rain forests for palm oil cultivation in the country. This was unfair to the oil palm industry and a non-tariff barrier, the minister added.

Chairman of the Palm Oil Council Dato’ Lee Yeow Chor said that a joint working group had already been set up and that the representatives of the two countries were set to meet shortly.

Refiners

The minister said that Malaysian palm oil refiners, who were handicapped by the relatively high price of crude palm oil vis-à-vis the commodity from Indonesia, now stood to gain from a decision by his ministry to lower export duty on crude palm oil.

He said that palm oil refineries in Malaysia had to do some catching up now as he referred the decision last week to lower duty on export of crude palm oil. He said that the Malaysian palm oil industry was resilient, and would overcome the challenges.

Duty structure

Malaysia, last week, decided to cut duty on export of crude palm oil which will make Malaysian supplies cheaper for Indian importers provided Indonesia does not change its strategies, according to the Executive Director of The Solvent Extractors’ Association of India, B. V. Mehta.

He was speaking to journalists on the sidelines of a two-day Palm Oil Trade Fair and Seminar 2012.

Imports

Under the new regime, effective January next year, the duty will range between 8.5 per cent and 5 per cent depending on the price range per tonne.

He said import of vegetable oils stood at 9.5 million tonnes between November and September this year. During November-September last year, India imported 7.77 million tonnes of vegetable oils.

(The correspondent is in Kuala Lumpur at the invitation of Malaysian Palm Oil Council.)

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