Veggie oil group scores rampant commodity smuggling

The Federation of Philippine Indsutries Inc., representing local vegetable oil manufacturers and distributors, has raised the alarm over alleged undervaluation of shipments and smuggling of palm olein oils into the country. The possibility that palm oil was smuggled into the country last year was based on import data from the Trade Department, the group said. Imported palm oil totaled 119,000 metric tons (MT) in 2007, it said. It went up to 139,000 MT in 2008, But there was a drastic drop in imports last year when the official volume recorded was only 76,000 MT. The group said that data from the Trade Department showed that several companies also undervalued palm olein shipments since 2007, citing Matahari Trading Inc. in particular. "This is technical smuggling," federation chairman Jesus Lim Arranza told reporters in a press briefing Tuesday in Makati City. This means that the government might have lost up to P100 million from technical smuggling in vegetable and palm olein oils since 2007. Arranza alleged that importers managed to undervalue shipments in cahoots with some officials and employees of the Bureau of Customs (BOC). “We should also look into these Customs officials. They should likewise be penalized for their unethical conduct. Not only are they cheating the government, they are also killing the local vegetable oil industry." Records showed that Matahari Trading’s palm olein imports was $0.10 per kilo on average in 2008, compared with $1.10 per kilo by the state-run CIIF-Oil Mills Group, the federtation said. Palm olein, the refined extract of palm oil, now fetches about $1,200 per MT in the world market. This translates to around $1.20 per kilogram of palm oil, according to the federation. The government likely lost around P23.01 million in value-added tax (VAT) last year with the undervaluation of imported palm oil, as the federation alleged that Matahari Trading did not pay around $494,940 in VAT in 2009. Matahari Trading president Giovanni Ong, however, said his company is not in collusion with Customs officials, and explained the pricing of the company’s imports. “We do not follow the international market price. We get our oil at a discount when our principal has enough surplus to sell to us. In fact, what we are selling now is part of our procurement two years ago," Ong said in an interview. Matahari has been in the palm oil business for 10 years and is the exclusive distributor of Bimoli cooking oil in the Philippines. The company buys its palm olein requirements from Indonesia. Still, the federation said it will submit the documents it got from the Trade Department to the Post-Entry Audit Group (PEAG) of the BOC within the week. Port of Manila district collector Rogel Gatchalian will also be given copies of the documents, Arranza said. —VS, GMANews.TV