ETALING JAYA: Colombia’s move to cut the imports of palm oil at a zero tariff rate offers an opportunity for Malaysian palm oil and oleo-chemical manufacturers to make inroads into the market. In its efforts to counter inflation, the Colombian government recently published Decree 343 authorising imports of palm oil at a 0% rate from the previous 40%, for a period of six months commencing on Feb 29, 2016 and ending on Aug 29, 2016.
“Although the decree is a temporary measure imposed by the government of Colombia, it represents a good business opportunity for Malaysian palm oil and oleo-chemical manufacturers to make inroads into the Colombian market provided they can come up with a competitive landed price,” Malaysia External Trade Development Corporation (Matrade) Trade Commissioner based in Miami Mohd Nadzri Saadon said in a statement yesterday.
The temporary reduction of tariffs applies to palm oil-related categories such as crude palm oil, palm oil and its fractions whether or not refined, but not chemically modified, crude palm kernel oil, vegetable oils and fats (hydrogenated and reesterified), margarine (excluding liquid margarine), other mixtures or preparations of vegetable oils and fats, and vegetable and animal oils and fats.
Meanwhile, oleochemical products such as stearic acid, oleic acid, and other monocarboxylic industrial fatty acids are included in the measure. According to Matrade, Colombian trade statistics show that imports of palm oil-related products in 2015 totalled US$129 million (RM501.3 million).
The import market is dominated by Ecuador with sales of US$71.1 million and 55.9% share, followed by Brazil registering US$10.6 million with 8.2% share, Peru with US$8.8 million and 6.86% share, USA posting US$3.2 million and 2.5% share, and Argentina with US$3 million and 2.35% share.
Malaysia’s exports of these products are valued at US$0.917 million and registered 0.71% of Colombia’s import market share. Fellow Asean member country, Indonesia, registered a similar market share.
Mohd Nadzri said the sharp depreciation of the Colombian peso against the dollar and the fact that Ecuador, the main supplier of palm oil to the Colombian market, which has adopted the dollar as its legal tender, has hurt Colombian importers by making imports more expensive.
