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 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.
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.