Bloomberg News

Dutch Vegetable-Oil Makers Claim Russia Is Breaching WTO Accords

September 07, 2012

Vegetable-oil makers in the Netherlands called on the country’s government to object to alleged Russian breaches of World Trade Organization tariff agreements for importing edible oils and fats.

Russia has maintained minimum import duties for palm oil, palm-kernel oil, coconut oil and some hydrogenated vegetable fats and oils, the Netherlands’ Product Board for Margarine, Fats and Oils, known by its Dutch acronym MVO, wrote in a statement on its website today. WTO tariff tables have no provision for minimum duties on those products, the board wrote.

“For the Dutch oil and fats industry, the Russian Federation is the most important sales market outside the EU,” the Rijswijk, Netherlands-based board wrote. It urged Economy Minister Maxime Verhagen to object to the purported breaches.

The Netherlands is the world’s fifth-largest importer of palm oil and its fractions, according to trade figures from the WTO and United Nations. Most of the oil is re-exported, making the country the third-biggest shipper of palm oil behind Indonesia and Malaysia, the data show.

Board President Wim Oosterhuis sent a letter to Verhagen today to ask him to complain to Russia, according to the MVO. Russia last month became the 156th member of the WTO after 18 years of talks.

The EU exported oils and fats worth 280 million euros ($358 million) to Russia last year, including 106 million euros by the Netherlands, the MVO wrote. Dutch exports of refined palm oil to Russia were 69 million euros, out of total EU shipments to the country of 80 million euros, according to the board.

Russia, within the WTO framework, agreed on a maximum import duty for refined palm oil of 5 percent in 2012, according to the product board.

Based on a price of 1,000 euros a metric ton, import duties for refined palm oil based on the WTO accords would be capped at 50 euros, according to the MVO. Russia’s minimum duty of 12 cents a kilogram (2.2 pounds) equates to 120 euros a ton, more than twice as much, according to the board.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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