KUALA LUMPUR: Inspite of expressing concern about new curbs of India on imports of palm oil, Prime Minister Mahathir Mohamad reiterated on Tuesday, that he would continue to speak out against “wrong things” even if it costs his country financially.
The biggest buyer of edible oils in the world, India, last week changed rules that traders say effectively ban imports of refined palm oil from Malaysia, the second-biggest producer and exporter of palm oil in the world after Indonesia.
The move came after New Delhi objected to the criticism of India’s new religion-based citizenship law by Mahathir. The 94-year-old Prime Minister, whose outspoken nature has soured ties with both Saudi Arabia and India in recent months, earlier accused India of invading the disputed Muslim-majority region of Kashmir.
As Malaysian palm refiners stare at a massive loss of business, Prime Minister Mahathir Mohamad said his government would find a solution.
Prime Minister Mahathir Mohamad informed the reporters “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”. He added, “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 benchmark palm oil contract was down 0.9% for March delivery in afternoon trade.
Reuters reported on Monday that the traders have been informally instructed by the Indian government to stay away from Malaysian palm oil. Indian traders are instead buying crude palm oil from Indonesia at a premium of $10 tonne over Malaysian prices.
The Foreign Ministry of India said on Thursday the palm curbs were not country specific but that “for any commercial trading, the status of relationship between any two countries” is something a business would consider.
Malaysia’s biggest buyer of palm oil was India in 2019, with 4.4 million tonnes of purchases. The Indian traders told that the purchases could fall below 1 million tonnes in 2020 if relations don’t improve.
To make up for the potential loss, the officials if Malaysia say they are trying to sell more to Pakistan, the Philippines, , Vietnam, Myanmar, Ethiopia, Saudi Arabia, Algeria, Egypt and Jordan.
But replacing the top buyer won’t be easy, and that’s the reason Malaysian Trades Union Congress, whose members include palm workers, has urged the two countries to talk things out.
“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.
Primary Industries Ministry of Malaysia, supported by the Ministry of Foreign Affairs, is engaging with its Indian counterparts to try and sort out the issue, according to a Malaysian government source aware of the discussions. He declined to be named as he was not authorised to speak to the media.
The ministries could not immediately be reached for comment.