ISLAMABAD: The government has decided to abolish two percent additional custom duties on the import of palm oil for shipments originating from all sources except Indonesia for 10-20 June 2022.

Sources told Business Recorder on Monday that the National Tariff Policy 2019-24 (NTP) stipulates that all proposals for levy, amendment or removal of tariffs shall be examined at the Tariff Policy Centre and after approval by the Tariff Policy Board, shall be submitted to the Cabinet or Parliament, as the case may be, for consideration.

It is stated that the Government of Indonesia had unilaterally decided to impose a ban on the export of palm oil since April 28,2022, which created supply uncertainties.

Pakistan is dependent on the import of palm oil from Indonesia as it imports more than 85 per cent of its palm oil from Indonesia.

While the Government of Indonesia has lifted the ban on the export of palm oil w.e.f. 23.05.2022 but at the same time, they have imposed the conditions that the exporters would also need to ensure 33 per cent supply to the domestic market and obtain an export permit. The said conditions are resulting in delays in the shipment of palm oil from Indonesia.

The other origin to import palm oil is from Malaysia where prices are relatively higher from Indonesia due to lower production. It may be noted that a concessionary tariff for palm oil is being applied to Indonesia and Malaysia under their respective FTA/PTA.

The business community has approached the Ministry of Commerce with proposal to mitigate the current situation and ensure sufficient stocks of edible palm oil, by extending certain duty advantage to import of palm oil front Malaysia under Free Trade Agreement ETA.

Indonesian palm oil: Envoy can help ensure resumption of supply?

Ministry of Industries and Production has also proposal grant of concessionary tariff relief to facilitate import of palm oil from sources other than Indonesia on an immediate basis. The issue of rising prices of edible oil and disruption in the supply line are being regularly discussed in the meetings of the PM Task on supply of palm oil.

Furthermore, the Ministry of Commerce has also taken necessary steps to mobilize the trade investment officers in Indonesia and Malaysia to follow-up with the host governments for securing the orders for the importers in Pakistan.

In view of the above, it is proposed to remove the seven per cent additional customs duties on the import of palm oil (including crude, palm, palm stearin, ROB Palm and RDB Palm Olein) for shipments originating from all sources other than Indonesia that reach Pakistan by 20.06.2022, in order to encourage importers to bring Palm oil Into Pakistan at the earliest.

It may, however, be noted that such discriminatory interventions against the principle of equal treatment are not in conformity to WTO flutes, but the unilateral export ban Imposed by Indonesia in violation to WTO rules, may result in shortage of palm oil in mid-June 2022, if import from alternate sources are not made Immediately. In view of this force majeure situation, a temporary tariff relief measure Is being proposed to mitigate the cost differential of importing Palm 011 from sources other than Indonesia.

Minister for Commerce chairs the Tariff Policy Board and since he is out of country due to official commitments, Tariff Policy Board meeting cannot be held due to paucity of time and depleting supplies of Palm oil.

In the country, the Issue is being directly referred to the ECC of the Cabinet. The summary has been shared with Ministry of Finance and Federal Board of Revenue with a request to submit their views on the proposal during the meeting of the ECC of Cabinet.

The ECC allowed removing two per cent additional custom duties on import of palm oil for shipments originating from all sources except Indonesia for 10-20 June 2022, subject to the approval of the federal cabinet.

Copyright Business Recorder, 2022

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Dr Habib Barkat Ch. May 31, 2022 06:01pm
AoA I want to give a suggestion. Govt should be discourage to people for more use of Ghee. Secondly. there r other sources of oil like soya Ben, sun flowers, etc . By whom they produce Ghee. Not depend only on palm oil.
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