Govt to use diplomatic channel on India’s palm oil restriction

At the moment, we are communicating with the Indian High Commission to sort this out, says MPI minister


MALAYSIA will use a diplomatic route to monitor the development of import restrictions and alleged blockage of Malaysian palm oil products by the Indian government, Primary Industries (MPI) Minister Teresa Kok (picture) said.

The government, she said, will continue to engage the Indian government, and its palm oil industry stakeholders on the matter.

“It is important for the government to further engage with the Indian government as well as the stakeholders through diplomatic channel.

“We are going to continue our engagement with them. At the moment, we are communicating with the Indian High Commission to sort this out,” she said at the Palm Oil Economic Review and Outlook Seminar 2020 in Kuala Lumpur yesterday.

Reports emerged stating that Indian importers have ceased all palm oil purchases from Malaysia after its government unofficially warned the industry players to avoid Malaysian products.

The report came after the Indian government issued a notice on the revised policy of refined bleached deodorised (RBD) palm oil and RBD palm olein imports, which were changed from “free” to “restricted”.

However, the Indian government has not made any official response to confirm or address the import ban and quantum of the import limitation for refined palm oil products.

India is the world’s largest purchaser of palm oil and palm oil products.

Last year, the country’s palm oil imports from Malaysia surged 75.4% from 2.51 million tonnes in 2018 to 4.4 million tonnes in 2019.

Due to high volume, its move to block palm oil imports could pressure the global palm oil prices and increase Malaysia’s palm oil inventories.

Separately, Kok said the government will establish a committee to manage a proposed trust account derived from the collection of windfall tax from the palm oil industry players and will ensure that the collection will be properly utilised to benefit the sector.

“We will include representatives across the industry as well as officials from the Ministry of Finance to oversee this levy in a transparent manner.

“The committee also has to come up with the most effective manner to utilise the windfall tax, so that it could benefit the industry players the most,” she said.

MPI estimates the trust account to collect about RM200 million from the windfall tax, of which will be partly reserved for the biodiesel stabilisation fund.

Effective Jan 1, 2020, a 3% per tonne windfall levy is imposed on planters in Peninsular Malaysia, excluding the smallholders, if the crude palm oil price exceeds RM2,500, while 1.5% levy is imposed on planters in Sabah and Sarawak when the price exceeds RM3,000.