The domestic production of refined vegetable oil this year is projectedat about 774,000 tonnes, up 7.8 percent from last year, the Ministry ofIndustry and Trade has said.

The ministry also forecast 2015's output at around 850,000 tonnes, 9.8 percent higher from this year's projected output.

However,it pointed out that local vegetable oil producers will continue to facehardship due to their heavy dependence on raw material imports.

The industry imports up to 90 percent of its raw material requirements, and their prices often tend to be volatile.

Local producers have also faced intensifying competition from vegetable oil imports, the ministry added.

During2011-13, refined vegetable oil production in the country rose 8.3 percent annually, which is a lower pace compared with previous years, as aresult of increasing competition from vegetable oil imports fromMalaysia, Singapore, Indonesia and Thailand, which enjoy zero importtax.

This forces the Ministry of Industry and Trade todecide in September last year to impose a 5 percent import tax onrefined soybean oil and palm oil, noting that the surge in imports isharming the domestic industry. The tariff is expected to gradually easeto 2 percent by 2017.

The ministry introduced the tax afteran eight-month investigation, which showed that the market share oflocal vegetable oil producers had declined from 52 percent in 2009 to 27percent in 2012, even as demand increased from 100 tonnes to 137.94tonnes during the same period.

The investigation wasinitiated in December following an application by the National Companyfor Vegetable Oils, Aromas and Cosmetics of Vietnam and seven otherproducers.

It is the first time the Government has invoked an ordinance on safeguard measures against imports, which it passed in 2002.-VNA