Malaysia has requested Pakistan to slash 20 percent regulatory and customs duty on import of crude palm oil (CPO) before fully implementing free trade agreement (FTA).
Pakistan charges a fixed amount of Rs 9,550 per tonne as regulatory and customs duty on CPO import besides 15 percent sales tax, but refineries are allowed to import CPO for Rs 9,000 per tone. Official estimates suggest that Pakistan imported 1.6 million tonnes of palm oil from Malaysia annually, majority of which is refined palm olein.
Malaysia, which is the world''''s largest palm oil producer, has requested Pakistan for reducing import duties on palm oil, official sources told Business Recorder on Thursday.
"They have exchanged the requests and offered lists before the enactment of the FTA between the two countries", they said, adding the issue would be resolved soon as the prime minister has constituted a committee of departments concerned to look into the matter.
"If the government accepts the offer by slashing the duty, the Central Board of Revenue (CBR) would roughly suffer a revenue loss of Rs 15 billion, therefore, they are opposing the move", the same officials opined.
However, the Ministry of Industry and Production had already proposed to the Economic Committee of Cabinet for slashing the duty on palm olein, but Minfal strongly objected to the move fearing it would hurt the growers of oil crops.
Thirty percent of other cooking oil is also mixed with imported CPO to make it consumable, therefore, it is difficult for the government to give one player concession, he added.
Pakistan is the world''''s fourth largest consumer of vegetable oils with a domestic demand for 2.5 million tonnes, 90 percent of which is covered by imports, mostly of Malaysian palm oil and olein, while only 12 percent consumption of cooking oil is met from domestic sources. Currently, the trade volume between Pakistan and Malaysian is $600 million (Euro 472 million) and would be enhanced to $1 billion (Euro786 million).
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