Thousands of tonnes of refined palm oil were delayed or stuck at various Indian ports after the world’s biggest edible oil buyer introduced restrictions on refined palm oil imports, according to Reuters.

“More than 30,000 tonnes have been stuck at various (Indian) ports. All theses vessels were loaded before the government restricted imports of refined palm oil,” Reuters quoted a Mumbai-based vegetable oil dealer, who declined to be named.

India changed the import status of refined bleached and deodorised (RBD) palm oil and RBD palm olein on 8 January to help domestic refiners raise their plant utilisation rates, Reuters said on 20 January.

However, tensions between India and Malaysia have also risen over New Delhi’s new citizenship law passed in December offering amnesty to non-Muslim illegal immigrants and its revoking of Indian-administered Kashmir’s special constitutional status last August.

Indian Ministry of External Affairs spokesperson Raveesh Kumar told The Times of India that the government’s restriction on refined bleached and deodorised (RBD) palm oil and RBD palm olein was product-specific and not country-specific.

“When you are looking at issues pertaining to the import of any product from any country, there are basically two factors – one is the commercial decision and the other could be defined by the trade policy and, in this case, it is being defined by the trade policy,” he said.

However, he added that the state of relationship between any two countries was important.

“That happens to be a factor,” he said.

Kumar explained that there were three categories for imports into India – open, restricted and prohibited and the status of RBD palm oil and palm olein had been amended from ‘free’ to ‘restricted’, meaning an importer would require a licence or permission for the inbound shipment.

India is the world’s largest importer of vegetable oil, buying nearly 15M tonnes/year, of which palm oil comprises 9M tonnes.

Muslim-majority Malaysia is the world’s second largest producer of palm oil, at 19M tonnes/year, after Indonesia, which produces around 43M tonnes/year.

The Reuters report included shipping data from Refinitiv showing Indian buyers cutting Malaysian palm oil imports sharply in late 2019 and increasing Indonesian orders (see graph).