The Ministry of Industry and Trade has decided to take this temporary measure against vegetable oil imports. It is adopted towards the products imported from all the countries under investigation, except those with negligible exports to Vietnam.
The measure comes after the ministry conducted an investigation into the aforesaid items from December 26. Preliminary results show that increased imports have caused serious damage to local vegetable oil producers.
Imports of the oil products under investigation were on the rise in the period from 2009 to 2012. In 2010 and 2011, the volume of imported vegetable oils grew 18.82% and 8.7% respectively, and in 2012, it surged 57.61%.
During this period, the market share of locally-made products declined from 37% to 22%, corresponding to an increase in the market share of imports from 33% to 51%. In 2012, the market share of vegetable oil imports nearly tripled that of domestic products.
The vegetable oil output at home fell significantly, down 30% in 2012, hitting the lowest level in 2009-2012. The revenue of local oil producers had grown steadily as of 2011, but last year their revenue unexpectedly dropped 32% over 2011.
As such, their profits also decreased. In 2012, profits of domestic producers dramatically slid 35% year-on-year, in contrast to the trend in 2009-2011.
The 15% reduction in prices of imported vegetable oils last year prompted domestic oil firms to cut prices by 9%, although the prices had been rising in the period from 2009 to 2011.
As a result, investment and employment in the industry declined markedly. The unsold volume increased by 33%, hitting the record high during 2009-2012, accounting for 5% of total output.
Currently, vegetable oils imported into Vietnam are levied a tariff of 22.5-37.5%, but those imported from ASEAN members enjoy a zero tax rate under the ASEAN Trade in Goods Agreement (ATIGA). The products imported from South Korea are also tax exempt under the agreement between ASEAN and South Korea.
According to the General Department of Customs, Vietnam imports the most vegetable oils from Malaysia and Indonesia.
