PCA wants tariff on palm oil retained at 5%

The Philippine Coconut Authority (PCA) will push for the retention of the five-percent tariff on imported palm oil after all tariffs are brought down to zero percent by 2010 under the Association of Southeast Asian Nations (ASEAN)- Common Effective Preferential Tariff.

"We will seek extension of the five-percent tariff on palm oil beyond 2010 until such time that we are self-sufficient in palm oil," said Arturo Liquete, deputy administrator for marketing of PCA.

He said the tariff rate is already low, and bringing this down to zero percent, while benefiting consumers, will defeat the objective of increasing local production and bringing these to self-sufficient levels.

"We want to encourage more production of palm oil and lure in more investments in this sector. It would be a disincentive to investors if there is no tariff shield at all," explained Liquete.

Currently, palm oil hectarage is 29,000 hectares, but government is targeting to raise this to about 160,000 hectares.

"If we have 160,000 hectares, then we would be self-sufficient in palm oil and then we can ease rules on palm oil imports," said Liquete.

He allayed fears that palm oil imports will displace domestically-produced coconut oil (CNO).

Local CNO producers are getting worried about the increased volume of PO entering not just institutional customers, but also households that buy these from local supermarket chains.

Coconut producers said the influx of cheap PO would bring down copra prices.

As this developed, weaker demand and soft prices brought down the country’s coconut exports for the first seven months by 1.6 percent to $522.24 million from $528.9 million during the same period last year.

In contrast, total volume of shipments of coconut-based products went up by 14 percent to 1.23 million MT from 1.09 million MT last year.

Despite an anticipated upsurge in coconut oil (CNO) prices, actual prices during the period went down by 15.37 percent to $519.72 per MT from $614.12 per MT last year.

Copra meal prices also took a dive by close to 27 percent to $58.14 per MT.