KARACHI, Nov 29: Pakistan is likely to reduce the import duty on palm oil in December as domestic prices have started surging, industry officials told Reuters on Wednesday.

“The duty cut should be coming in December,” said the industry source, who closely tracks developments in the government.

Amjad Rasheed, chairman of the Pakistan Vanaspati Manufacturers Association, said the group discussed the possible duty cut on the import of palm oil with the Pakistani tax officials.

Pakistan charges a fixed Rs9,500 ($156.2) a ton as regulatory and customs duty on palm oil imports, apart from a 15 per cent sales tax. Refiners are allowed to import crude palm oil at a duty of Rs9,000 per ton.

“We proposed a change in duty structure and have asked the government to charge higher duty when international prices are low, while tax rates should be less when the prices are high,” Mr Rasheed said.

“They agreed to discuss this proposal with us and hopefully another meeting will be held in the second week of December.” The local edible oil prices have increased almost 25 per cent during the last one and a half months to Rs1,120 per 40 kg in line with the international prices, which increased around $100 per ton during the same period.

Pakistani trade authorities are considering a cut in the import duty on palm oil following a request earlier this month from the government of Malaysia, the main supplier.

An agriculture ministry official said the government would decide after consulting all parties in the edible oil trade.

Another trade official, who asked not to be named, said the industry was expecting a duty cut “very soon” as high edible oil prices were adding to inflationary pressures.

“In principle the government has agreed a cut in duty and we are expecting a decision in less than a month,” he said.—Reuters