HANOI: On May 10 the Viet Nam Competition Authority warned that the import tax on crude and refined edible oils, reduced from 3 per cent this month to 2 per cent, would be scrapped altogether in May 2017. This means that the protective measures the Government has applied since 2013 to safeguard domestic oil producers from rising imports are coming to an end.
In September 2013 the Ministry of Industry and Trade decided to impose a 5 per cent import tax on refined soybean oil and palm oil after an eight-month-long investigation found that the market share of local producers had fallen from 52 per cent in 2009 to 27 per cent in 2012 even as demand went up from 100,000 tonnes to 137,940 tonnes.
Protective measures were put in place against imports. The investigation was initiated following a demand by the National Corporation for Vegetable Oils, Aromas and Cosmetics of Vietnam (Vocarimex) and seven other producers when oil imports increased sharply.
The complainants said the increase in vegetable oil imports had led to sharp falls in domestic companies’ market share, affecting many of them. In 2012 Viet Nam imported more than 568,000 tonnes of vegetable oil, and this increased by 5.3 per cent and 11.3 per cent in the next two years. Meanwhile, the market share of domestic producers plummeted to a mere 11.3 per cent by 2014. Imports have kept rising, reaching almost 750,000 tonnes, including palm oil (690,000 tonnes), soy oil (5,000 tonnes) and others (55,000 tonnes) in 2015.
