July 22, 2015 / 12:37 PM / in 5 years

Russia considers limits on palm oil use in food production

MOSCOW, July 22 (Reuters) - Russia is considering imposing limits on the use of palm oil in food production, Deputy Prime Minister Arkady Dvorkovich was quoted as saying by Russian news agencies on Wednesday.

TASS news agency quoted Dvorkovich, who oversees the agriculture sector, as saying the government was yet to decide on what action to take.

Proposals include tightening rules on use of the tropical oil and greater transparency in the sector, Interfax quoted Dvorkovich as telling reporters in the Siberian city of Irkutsk.

The reports gave no indication as to why the government was considering the limits.

Russia banned most Western food imports in August 2014 in response to economic sanctions imposed by Western governments over Moscow’s role in the crisis in Ukraine.

Coupled with a decline by the rouble against the U.S. dollar, the ban has forced domestic food producers to use cheaper raw materials, including more palm oil, to try to cut costs, Vedomosti newspaper reported this week.

Russia has imported 512,000 tonnes of palm oil since the start of the marketing year on Oct. 1, Andrey Sizov, the head of SovEcon agriculture consultancy, told Reuters.

The bulk of imports - 418,000 tonnes - came from Indonesia, the world’s top producer of palm oil, while Malaysia was the second largest supplier.

This marketing year, Russia has already imported more palm oil than for the whole previous season, Sizov said.

The rise in imports was not caused by the Russian ban on Western food imports, he said. Domestic prices for sunflower oil have been relatively high in Russia this year, which has made palm oil imports more competitive, Sizov added. (Reporting by Polina Devitt; editing by Timothy Heritage and David Evans)

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