ISLAMABAD: The Pakistani cabinet has approved a 15 percent cut in the import duty for Indonesian crude palm oil and products, the commerce ministry said on Thursday, putting the world's top palm oil exporter on a par with rival Malaysia.
Malaysia has enjoyed a lower duty than the standard rate since 2007, allowing it to grab the bulk of the market in the world's fourth largest buyer of palm oil.
"Pakistan will import palm oil from Indonesia at a 15 percent margin of preference rate," the ministry said in a statement, citing a cabinet decision on Wednesday.
Currently, Pakistan adds a duty of 9,500 to 10,800 Pakistani rupees per tonne on Indonesian palm oil products.
The statement did not say when the agreement will take effect, but officials in September said the lower duty on palm oil would be implemented by January 2012.
Pakistan imported $1.83 billion worth of crude palm oil and palm oil products in the 2010-11 (July-June) financial year, and dealers said the bulk of it came from Malaysia.
Pakistan Secretary of Commerce Zafar Mahmood has previously said Indonesia's share of the country's palm oil imports fell to 5 percent from 55 percent since Malaysia started receiving preferential import duties.
The agreement would help to reduce domestic prices of cooking and vegetable oil in Pakistan, the statement said.
As part of the deal, Indonesia agreed to import 221 Pakistani products like fruits, cotton yarn, cotton fabrics, readymade garments and leather goods on preferential rates.
In return, Pakistan agreed to give preferential access to 288 Indonesian products to its market.
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