MUMBAI, India's monthly palm oil imports
from Malaysia could fall to the lowest level in nearly nine
years in January as traders stopped buying the tropical oil from
Kuala Lumpur following informal instructions from New Delhi,
traders and refiners told Reuters.
Lower imports by India, the world's biggest palm oil
importer, could weigh on Malaysian prices FCPOc3 that have
corrected nearly a tenth after hitting a three-year peak earlier
In the second week of January New Delhi privately urged palm
oil importers to boycott Malaysian products after the country's
Prime Minister criticised India's actions in Kashmir and its new
citizenship law. nL4N29J09M
Some traders had been hoping state-run trading firms could
buy refined palm oil for the public distribution system by
floating tenders, but this does not seem to have materialised.
"No one is buying Malaysia's crude palm oil (CPO) or
palmolein for February shipments. There are no open tenders from
state agencies yet," said a Kuala Lumpur-based trader.
India is set to import less than 70,000 tonnes of palm oil
from Malaysia in January, the lowest since April 2011 and
significantly lower than the 253,889 tonnes it imported in
January 2019, traders and refiners said.
In February imports could be negligible at less than 10,000
tonnes as almost every Indian buyer has switched to Indonesia,
"Traders stopped buying from Malaysia after the government
gave verbal instructions. This month's shipments are from the
contracts signed before the government instructions," said a
Mumbai-based dealer with one global trading firm.
In 2019, India imported 4.4 million tonnes of palm oil from
Malaysia, with average monthly imports of 367,459 tonnes,
Malaysian Palm Oil Board (MPOB) data showed.
Indonesian sellers are currently charging a premium around
$25 per tonne over CPO supplies from Malaysia, but "we have
little choice but to buy," said an Indian refiner, which had
shifted its entire buying to Indonesia.
India's palm oil imports from Indonesia could be around
550,000 tonnes in January, said Sandeep Bajoria, chief executive
of the Sunvin Group, a Mumbai-based vegetable oil importer.
Indonesia is the world's biggest producer of palm oil,
followed by Malaysia.
Palm oil accounts for nearly two-thirds of India's total
edible oil imports. India buys more than 9 million tonnes of
palm oil annually, mainly from Indonesia and Malaysia.
"Even in coming months, Indian imports would be negligible
from Malaysia, unless the Indian government changes its stance,"
said an importer based at Indore in the central state of Madhya
Source: ASEAN Exchanges