Kuala Lumpur: Malaysia is concerned about India’s new restrictions on palm oil imports after a diplomatic dispute, Prime Minister Mahathir Mohamad said Tuesday, but said he would continue to speak against “wrong things,” even if it costs him Your country financially.
India, the world’s largest buyer of edible oils, last week changed the rules that traders say effectively ban imports of refined palm oil from Malaysia, the world’s second largest producer and exporter of palm oil after Indonesia.
The move came after New Delhi opposed Mahathir’s criticism of the new citizenship law based on the religion of India. The 94-year-old prime minister, whose open nature has cracked ties with India and Saudi Arabia in recent months, previously accused India of “invading” the disputed Muslim majority region of Kashmir.
While Malaysian palm refineries observe a massive loss of business, Mahathir said his government would find a solution.
“Of course, we are worried because we sell a lot of palm oil to India, but on the other hand, we must be frank and see that if something goes wrong, we will have to say it,” he told reporters. “If we allow things to go wrong and just think about the money involved, then I think we and other people will do many bad things.”
The palm oil reference contract for delivery in March fell 0.9 percent in the afternoon trade. Reuters He reported Monday that the Indian government had informally ordered merchants to stay away from Malaysian palm oil. Instead, Indian merchants are buying Indonesian raw palm oil with a premium of $ 10 tons over Malaysian prices.
The Foreign Ministry of India said on Thursday that palm curbs were not country-specific, but that “for any commercial trade, the state of the relationship between two countries” is something that a company would consider.
India was the largest buyer of Malaysian palm oil in 2019, with 4.4 million tons of purchases. In 2020, purchases could fall below 1 million tons if relations do not improve, say Indian merchants. To compensate for the potential loss, Malaysian officials say they are trying to sell more to Pakistan, the Philippines, Myanmar, Vietnam, Ethiopia, Saudi Arabia, Egypt, Algeria and Jordan.
But replacing the main buyer will not be easy, and that is why the Malaysian Trade Union Congress, whose members include palm workers, has urged the two countries to speak. “We want to implore both governments to use all possible diplomatic channels to solve this problem, leaving aside any personal or diplomatic ego,” he said in a statement.
The Ministry of Primary Industries of Malaysia, with the support of the Ministry of Foreign Affairs, is collaborating with its Indian counterparts to try to solve the problem, according to a Malaysian government source aware of the discussions. He declined to be named since he was not authorized to speak with the media.
The ministries could not be reached immediately for comment.
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