‘Getting back to normal’: Malaysia-India palm oil trade back on track due to better prices, food security needs
By Pearly Neo
- Last updated on
Trend: Food supply and security concerns
Palm oil trade between Malaysia and India was seen to be moving back on track as of August, with the latter running low on local stock and the former relaxing export tariffs as both countries move to repair a trade relationship wrecked by previous political clashing.
The Indian government issued a boycott order on Malaysian palm oil to all its traders in January this year after then-Malaysian Prime Minister Tun Dr Mahathir Mohammad criticised India’s move to strip Kashmir of its special status and ‘invading and occupying’ it.
Tun Mahathir was ousted by successor and current Prime Minister Muhyiddin Yassin in March, and since then both countries have been trying to repair ties, although the progress for this is ‘taking time’.
“For the first few months of 2020, Malaysian palm oil exports to India were hit pretty badly, they were only taking some 10% to 12% of their normal monthly intake,” Malaysian Palm Oil Council (MPOC) CEO Datuk Dr Kalyana Sundram told FoodNavigator-Asia.
“One of the primary reasons for this was also due to the shutdown of the Hotel, Restaurants and Cafes (HORECA) industry in the country, as palm oil is mostly used by this industry and it could not function under lockdowns.
“Demand seems to be back on the rise now. Also domestic stocks they had left were running out and they need to replenish, so are importing more palm oil again – At the end of the day, palm oil is a crucial part of the country’s food security so they have to replenish.”