India tweaks rule for Malaysian palm oil after Mahathir’s CAA remark. He responds
India, the world’s largest buyer of edible oils, last week changed rules to effectively bar imports of refined palm oil from Malaysia, the world’s second-biggest producer and exporter after Indonesia.Updated: Jan 14, 2020 18:11 IST
Malaysian Prime Minister Mahathir Mohamad said on Tuesday he will continue speaking out against “wrong things” even if it costs his country financially, amid growing concerns about India’s curbs on palm oil imports after a diplomatic row.
India, the world’s largest buyer of edible oils, last week changed rules to effectively bar imports of refined palm oil from Malaysia, the world’s second-biggest producer and exporter after Indonesia.
A notification from India’s ministry of commerce and industry moved the import of refined palm oil and palmolein from the “free” to “restricted” category and people familiar with developments said the move was specifically aimed at Malaysia because Mahathir’s remarks on Kashmir and the Citizenship (Amendment) Act (CAA).
As Malaysian palm refiners stared at massive losses, Mahathir said his government will find a solution.
“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 see that if something goes wrong, we will have to say it,” the 94-year-old premier told reporters in Kuala Lumpur.
“If we allow things to go wrong and think only about the money involved, then I think a lot of wrong things will be done, by us and by other people.”
The people cited above said India had made its position very clear to the Malaysian side.
“We called in the Malaysian charge d’affaires to register a protest. We have said such statements go against the spirit of the long-standing ties between India and Malaysia. There is nothing more to say,” said a person who declined to be identified.
The Indian government has informally instructed traders to stay away from Malaysian palm oil, Reuters reported on Monday. Indian traders are now buying Indonesian crude palm oil at a premium of $10 per tonne over Malaysian prices.
External affairs ministry spokesperson Raveesh Kumar said last week the new notification was not country-specific. But he added: “The status of the relationship between any two countries is (something) any business would look at before they get into trading.”
India was Malaysia’s biggest buyer of palm oil in 2019, with 4.4 million tonnes of purchases. In 2020, purchases could fall below 1 million tonnes if relations don’t improve, Indian traders said.
Though Malaysian officials said they were trying to sell more palm oil to Pakistan, the Philippines, Myanmar, Vietnam, Ethiopia, Saudi Arabia and Egypt, the Malaysian Trades Union Congress has said the matter should be sorted out with India.
“We wish to implore upon both governments to use all possible diplomatic channels to resolve this issue putting aside any personal or diplomatic ego,” it said in a statement.
(With inputs from agencies)