Malaysia Palm Oil News: India Resumes Purchases of Malaysian Palm Oil: Report | Business News in India

MUMBAI / SINGAPORE: Indian buyers have resumed purchasing Malaysian palm oil after a four-month hiatus following a diplomatic row, with purchases boosted by lower domestic stocks and reduced prices, trade sources said.
The renewed purchases come amid improving trade relations between the two countries following the formation of a new government in Kuala Lumpur, as Malaysia signed an agreement last week to purchase a record 100,000 tonnes of Indian rice.
Major Indian importers last week contracted up to 200,000 tonnes of crude palm oil from Malaysia, the world’s second-largest producer after Indonesia, to ship in June and July, the sources told Reuters.
“Port stocks have fallen sharply in India due to lower imports,” said a Singapore-based trader who sells Malaysian and Indonesian palm oil.
Ship tracking data compiled by Refinitiv showed that India’s total palm oil imports for the first four months of 2020 fell by more than 50% from the same period in 2019 to reach 1, 11 million tonnes.
A restart in purchases by India, the world’s largest importer of edible oil, could further support Malaysian palm oil prices, which have risen slightly from their 10-month lows in recent days.
Earlier this year, India restricted imports of Malaysian palm oil after then Prime Minister Mahathir Mohamad criticized New Delhi’s policies.
The pick-up in buying has been spurred by low inventories, as India’s relations with Malaysia improve since a new government was formed in early March, said an Indian edible oil refiner who contracted. a few ships “for the June expedition.
“I believe the Indian government will allow unloading of upcoming shipments. We can’t rely on one seller (Indonesia) indefinitely, especially when you need to build inventory, ”the buyer said.
The Commerce Department did not immediately respond to a request for comment on Tuesday.
Interesting discount
Malaysian palm oil is now available with a $ 15 rebate on supplies from Indonesia, which on Monday raised its tax on palm oil exports by $ 5 a tonne, a dealer based at Mumbai with a global trading company.
Indian palm oil purchases from Malaysia could rise further if discounts persist, he said.
Malaysian buyers are eager to sell even at a discount as inventories rise and production is expected to improve in June, said India’s second-largest edible oil refiner, which bought Malaysian palm oil.
Malaysia’s palm oil stocks jumped to more than 2 million tonnes in April, well above expectations, as production peaked in six months and coronavirus closures led to plummet demand.
India buys over 9 million tonnes of palm oil per year, which accounts for nearly two-thirds of its total edible oil imports, and has taken a record 4.4 million tonnes of oil from Malaysian palm in 2019.
“The Indonesian export tax allows Malaysian sellers to offer a discount. It’s tempting for Indian buyers, ”said Anilkumar Bagani, head of research for Sunvin Group, a vegetable oil broker based in Mumbai.

Steve R. Hansen

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