Traders say Indian purchases of Malaysian palm oil resume

Indian buyers have resumed purchases of Malaysian palm oil after a four-month gap following a diplomatic row, trade sources told Reuters on 19 May.

According to traders, buying had been spurred by a fall in domestic inventories and discounted prices.

The renewed purchases followed improved trade relations between the two countries following the formation of a new government in Malaysia.

In January, India restricted imports of Malaysian palm oil after Mahathir Mohamad, the country’s prime minister at the time, criticised Indian government policies affecting the country’s Muslim minority. New Delhi had passed a new citizenship law in December offering amnesty to non-Muslim illegal immigrants, and had revoked of Indian-administered Kashmir’s special constitutional status in August.

Sources told Reuters that leading Indian importers had contracted up to 200,000 tonnes of crude palm oil (CPO) from Malaysia in May to be shipped in June and July.

“Port stocks have dropped sharply in India because of lower imports,” a Singapore-based trader who sold Malaysian and Indonesian palm oil had told Reuters.

Ship tracking data compiled by Refinitiv had shown that India’s total palm oil imports for the first four months of 2020 had fallen by more than 50% from the same period in 2019 to 1.11M tonnes.
India is the world’s largest importer of vegetable oil, buying nearly 15M tonnes/year, of which palm oil comprises around 9M tonnes.