RPT-India’s January palm oil imports from Malaysia could hit 9-yr low – trade

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

this month.

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,

they said.

"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