India continues to buy more palm oil from Malaysia as Kuala Lumpur offered USD 5 a ton discount against its rival Indonesia. Accordingly, Indian refiners are signing purchase deals for 70.000 tonnes for December.
Previously, following a nationalistic protest, Indian refiners boycotted Malaysian palm oil products for nearly a month. The ban was in effect after the Solvent Extractors’ Association of India (SEAI), one of India’s biggest trade bodies, urged its members to ban the products.
The nationalistic protest was due to Malaysian PM Mahathir’s comment on Kashmir. In short, Malaysia opined that India violated Kashmir and India was furious about that.
However, the fundamental reason of the ban exceeds a sole nationalistic protest. It was the government’s plan to excessively increase tariffs on Malaysian palm oil products that significantly drove the boycott.
While this gives another robust reason to buy palm oil from Malaysia again, some refiners are unwilling to take the risk. This is so for Indian government has not announced any official policy since its planning, signifying that it can happen at any time.
“The dispute has been going on for a month but still India hasn’t come out with concrete measures. Some traders have started taking risks, assuming it may not impose a duty on Malaysian palm oil,” a Mumbai-based importer told Reuters.
Also Read: Malaysia to Resolve Spat with India, Hopes RCEP Deal Pushes Through
Malaysia to Continue Palm Oil Business with India as Deal Signed
India Malaysia palm oil will continue amid the boycott in India. Primary Industries Minister Teresa Kok said so following the signing of an MoU pertaining to the trade.
“India has a 1.3 billion population. There are many companies and traders, so not everyone will do the same,” said Kok. “It’s just the association.”
What Kok said bears truth as India has not confirmed the additional tariffs after it announced the plan. However, many Indian refiners were too hasty to move competitor Indonesia.
Despite the signing, Malaysia plans to spread its trade to other regions as well. Among the targets, Asean, Africa, and Middle East are its priorities.
“On top of India and China, I am confident that Malaysia will find new and alternative markets for palm oil with growth targeted in Asean, Africa and the Middle East,” she added.
Palm oil trade has contributed 2.8% to Malaysia’s GDP last year and 4.5% to total exports. Malaysia is, in addition, the second biggest palm oil producer after Indonesia.
Also Read: PM Mahathir Warns of Possible Trade Sanctions on Malaysia
