Indian palm oil refiners and traders are said to have shifted palm oil purchases to Indonesia
by RAHIMI YUNUS / pic by BLOOMBERG
INDIA has slapped import restrictions on refined palm oil from the current “Free” import status, as the world’s largest importer of the commodity is believed wanting to protect local refiners against competition from foreign rivals.
In an official communication signed by Indian DG of Foreign Trade Amit Yadav, dated Jan 8, 2020, the Indian government has amended the import policy of items under Exim Code 1511 90, which imposed trade restrictions on refined bleached deodorised palm oil (1511 90 10), refined bleached deodorised palm olein (1511 90 20) and others (1511 90 90).
“Import policy of items under Exim Code 1511 90 is amended from ‘Free’ to ‘Restricted’. This issues with the approval of minister of commerce and industry,” according to the notification sighted by The Malaysian Reserve.
Despite the refined palm oil restriction, India has cut crude palm oil (CPO) and refined palm oil duties from South-East Asian countries from 40% to 37.5% and 50% to 45% respectively.
The CPO price jumped to a new three-year high at over RM3,100 a tonne on positive demand-supply fundamentals despite the threat of boycotts from India.
Reuters recently reported that Indian palm oil importers had stopped all purchases from top Malaysian suppliers following directives from the government.
Indian palm oil refiners and traders are said to have shifted palm oil purchases to Indonesia, the world’s top exporter, despite having to pay a higher price.
Malaysia is the world’s second-largest palm oil exporter after Indonesia, exporting more than four million tonnes last year, according to the Malaysian Palm Oil Board data.
The Indian palm oil curb was put into effect after Malaysia criticised India on its new citizenship law that affected the disputed, Muslim-majority Kashmir.
The new law is viewed as discriminating against Muslims to attain Indian citizenship.
Prime Minister Tun Dr Mahathir Mohamad defended the criticism, saying the country must speak up against the wrong things.
“We are concerned of course because we sell a lot of palm oil to India. But on the other hand, we need to be frank and when something goes wrong, we need to say it.
“If we allow things to go wrong and think only about the money, then a lot of things will go wrong,” Dr Mahathir said at Bank Rakyat Integrity Forum 2020 in Kuala Lumpur yesterday.