Hap Seng says India will eventually come back because they cannot be buying more expensive oil
By SHAZNI ONG / Pic By BLOOMBERG
INDIA’S recent call for a boycott on Malaysian palm oil is expected to be “short-lived” as the country could return for the commodity eventually, said Hap Seng Consolidated Bhd group MD Datuk Edward Lee Ming Foo.
“I think they are just talking about it. It has not been implemented yet. Even after they announced it, the price actually went up. Basically, it’s more of a supply and demand situation.
“If you look at palm oil, it’s still the cheapest and most efficient oil produced. So, whatever it is, I think India will eventually come back because they cannot be buying more expensive oil,” Lee told The Malaysian Reserve after the company’s EGM in Kuala Lumpur last Friday.
From an industry point of view, he opined that the dispute over the commodity is merely short term.
“In terms of our business, we do not have refineries so we do not export our oil to India or overseas. We just sell to local refineries,” he added.
The conglomerate operates across six sectors — plantations, real estate, credit financing, automotive, fertilisers trading and building materials.
Lee reiterated that the future remains bright, given positive world population growth and continued demand for the competitive edible oil.
It was reported recently that the Indian government may consider imposing trade curbs on Malaysia’s goods following Prime Minister Tun Dr Mahathir Mohamad’s remarks on Jammu and Kashmir at the recent United Nations General Assembly.
Indian traders have reportedly been told to stop buying palm oil from Malaysia, the world’s second biggest exporter.
Nevertheless, Dr Mahathir said Malaysia remains friendly with India and is keen for both countries to enjoy better relations, following fears of a trade backlash over his remarks on the region.
India, the world’s largest importer of vegetable oils, relies on Indonesia and Malaysia for its palm oil supply.
Malaysia exported US$1.65 billion (RM6.9 billion) worth of palm oil to India last year. In the first nine months of 2019, the country shipped 3.91 million tonnes of palm oil to India, 107% higher than 1.89 million tonnes exported a year ago, statistics from the Malaysian Palm Oil Board showed.
Besides palm oil, Malaysia’s trade with India includes oil and gas, automobiles, chemicals, electrical and electronics, food and other finished goods.
Last year, the country’s total trade with India rose 2.2% to RM62.76 billion from RM61.38 billion in 2017.
Meanwhile, Hap Seng chairman Datuk Jorgen Bornhoft said the company’s proposed disposal of HS Credit (Melbourne) Pte Ltd to Lei Shing Hong Capital Ltd for US$175.5 million has received 100% shareholder approval.