Lifting of tariff on palm oil won’t affect coco industry, says CORA

The Coconut Oil Refiners Association (CORA) downplayed fears its petition to lift the tariff duty on palm oil will adversely affect the ailing domestic coconut industry.

"The claim of Agriculture Secretary Luis Lorenzo Jr. that our petition will affect the coconut industry is unfounded. As a matter of fact, it will all the more help augment our export of coconut oil in the world market which now enjoys a premium price and the effect of which will filter down to the coconut farmers by way of higher copra prices," said Jesus Arranza, president of CORA.

CORA recently submitted a proposal to Malacañang that sought reprieve frm the 15- percent tariff imposed on imported palm olein. The local coconut oil refiners want to import palm olein – fractioned and palm oil, to ease the tight supply that resulted in higher copra prices and crude coconut oil (CNO) in the world market.

 Data from CORA show that palm olein prices are cheaper compared to CNO.

April and May delivery price for CNO was pegged at $780 per metric tons (MT) compared to $547.50 per MT of palm olein or a difference of $23.5 per MT.

CORA said the temporary lifting of the import duty will result in lower edible oil prices.

Lorenzo, however, said the DA  still wants to maintain the  existing tariff, saying that allowing imports of cheap palm olein could discourage local production of palm olein and also affect the viability of local coconut production.

He added that there is already considerable investment in palm oil development in Mindanao which the government is intending to fast track by planting more high-yielding palm trees.

Arranza said, however, that the country’s sole manufacturer of palm oil is also importing palm oil which proves inadequate local production.

Moreover, the planned imports of palm olein will hardly affect investments in palm plantations in Mindanao because these will only be harvested in three to four years.  

"We want to import to bring down prices of  edible oil. The government can implement this through the Philippine International Trading Corporation which will import and distribute them through the Gloria Rolling Stores or it can be done by the private sector," Arranza said. – Rocel Felix