Nov 10, 2011

Myanmar palm oil imports to continue

Minister for Commerce U Win Myint said the country had no choice but to continue importing palm oil if it wanted to keep prices stable, despite a call from one parliamentarian to protect domestic farmers.

U Win Myint made the comments during the 19th Myanmar Edible Oil Dealers Association’s annual meeting on October 29 at the Union of Myanmar Federation Commerce and Chamber on Min Ye Kyaw Swar Road in Latha township.

He warned that if imports were reduced prices were sure to rise, as they did in May this year, hitting a high of about K3400 a viss (1.6 kilograms or 3.6 pounds) in wholesale trade.

Earlier, U Ko Ko Gyi, the Pyithu Hluttaw representative for Aung Myae Thar San in Mandalay Region, on October 24 proposed in parliament that palm oil imports should be cut by 50pc to boost consumption and demand for locally produced sesame oil, particularly at harvest time.

U Khin Soe, the owners of Ayawaddy Peanut Oil Trading company, said the oil dealers association was not proposing palm oil imports be stopped, only reduced.

“We are not suggesting a halt to palm oil imports but we’d like to see imports restricted during the main sesame harvesting months of November and December to help farmers and ensure they earn at least K18,000 a basket [15 viss or 24 kilograms],” he said.

“That should be a minimum price because farmers usually have to take high-interest loans to plant sesame. If they do not get a good price for their crop they will not invest in production in the next harvest season,” he said.

U Win Myint said that about 200,000 tonnes of palm oil had been imported by 32 private companies this year. The oil is bought for about US$1075 a tonne, he added.

“People here consume a lot of oil and if we want to keep prices stable we must continue to import,” he said.

On April 9 the Ministry of Commerce opened up the previously restricted palm oil import market to new private competitors, who were allowed to import between 3000 and 4500 tonnes a month each. About 16 companies were given permission to import after prices hit K3400.

“The palm oil price spiked just after the new government took power in late March and we proposed private imports to stabilise prices,” said U Win Myint.

“The national oil consumption is about 900,000 tonnes a year but we can only produce about 590,000 tonnes of oil from sunflower, sesame and peanut, leaving a gap of about 310,000 tonnes, which we fill with palm oil imports,” U Win Myint said.

Sesame seed and oil, as well as peanuts and peanut oil were previously banned from being exported but the government eased these restrictions on August 29 in an effort to boost prices. Within a fortnight the market price jumped to K880,000 a tonne from K700,000, he said.

Source: Myanmar Times