MUMBAI/NEW DELHI: India has informally asked palm oil refiners and traders to avoid buying Malaysian palm oil, government and industry sources said, following Kuala Lumpur’s criticism of India’s actions in Kashmir and its new citizenship law.
Palm oil inventories could spike in Malaysia, and prices may come under pressure if India, the world’s biggest buyer of palm oil, reduces purchases from the country.
“In Monday’s meeting we have been verbally told to avoid buying Malaysian palm oil,” a senior industry official, who attended a meeting in New Delhi of two dozen industry officials, said.
“We’ve had various rounds of meetings within the government and industry to see how we could reduce imports from Malaysia,” one government official said, adding India is yet to firm up a plan of action and is exploring various options.
Malaysian Palm Oil Council CEO Datuk Dr Kalyana Sundram meanwhile said in Kuala Lumpur that the government had not yet seen an official response from the Indian government.
“It was only some importing associations which indicated they would do something, but buyers in India still continue to buy (our palm oil),” he added.
On crude palm oil (CPO) prices , Sundram expects them to remain on an uptrend from RM3,116 per tonne currently despite the renewed Middle East geopolitical tensions.
The uptrend would be supported by the reduction in Indonesia’s palm oil production and the surge in crude oil prices amid the Middle East tensions, he explained.
“We see an upward trend by factoring in the demand and supply situation, whereby Indonesia’s production is not as high as anticipated previously,” he added.
On the impact of the higher crude oil prices, Sundram said such a rise would traditionally support the prices of CPO and other edible oils.
“Hence we are very positive about the current CPO prices, of which the last closing price stood at RM3,116 per tonne,” he told reporters on the sidelines of the “We Love Palm Oil” forum in Kuala Lumpur.
According to him, the current prices correctly reflect the value of palm oil in the market.
“Since the price is already above RM3,100, we hope it will keep rising a bit more. We think it will go up further before it stabilises,” he said. – Jan 7, 2020 Reuters, Bernama
