MUMBAI, Sept 24: Malaysia is exploring the possibility of setting up joint ventures to process crude palm oil in India to offset falling exports caused by a change in India’s levies, a top industry official said.

The east Asian country is the world’s biggest palm oil producer and India its biggest edible oil importer.

India cut import levies on crude palm oil (CPO) to 65 per cent from 75 per cent in October last year to try to promote its processing industry. The import duty on refined oils was kept at 85 per cent.

The changes encouraged India to import more CPO for processing, while drastically reducing imports of processed palm oil from Malaysia.

India’s purchases of RBD palm olein, mostly from Malaysia, tumbled to 118,895 tons in November 2001 to August 2002, more than 90 percent down from a year earlier.

Siraj said he hoped a joint venture project would help to convince the Malaysian government to lower the export levy.

Malaysia allowed its firms to export 1.3 million tons of CPO in 2002 without any duty to counter Indonesian exports, he said.

India consumes about 10 million tons of edible oils each year, half of which is imported. Palm oil accounts for about 70 per cent and soyaoil, from Argentina and Brazil, the rest.

Siraj said Malaysia was also exploring new markets and other uses to boost palm oil exports.

Malaysia was working on a project to produce 500,000 tons of bio-diesel every year from palm oil, he said, adding the project could be completed by December.—Reuters