Refiners from Malaysia are expected to be greatly hit with India’s restriction on refined bleached deodorized oils and palm olein imports.
The Indian Ministry of Commerce and Industry issued a notification amending the import policy from “Free to Restricted.”
It means that the trader will require a license or consent for the inbound shipments which entails a long queue.
According to reports, this move came after Malaysian Prime Minister Mahathir’s negative remarks on the new Citizenship Amendment Act and the Kashmir issue of India.
Malaysia’s Maybank IB Research said the forced curb will lead Indian importers to switch to crude palm oil produced by Indonesian farmers as its price are more competitive.
“The switch will likely hurt local refiners as processed palm oil accounts for over 70% of Malaysia’s total exports in recent years,” the research unit explained.
Sarawak Oil Palms Bhd is among the affected Malaysian refiners because India serves as its top export market apart from local trading in Bintulu and Sarawak.
Malaysia, which produces 19 million tonnes of palm oil yearly, is India’s main supplier of refined palm oil and palm olein.
While Malaysia is put at a disadvantage, analysts say that the decision is likely to help Indonesian refiners of crude palm oil as well as Indian refiners of vegetable oil.