The Solvent Extractors' Association of India Monday sent out an advisory to avoid purchases of Malaysian palm oil to its members.
"As responsible Indian vegetable oil industry, we avoid purchasing of palm oil from Malaysia till such time clarity on the way forward emerges from Indian Government, "Atul Chaturvedi, president of the Mumbai-based trade and industry body for edible oils, said in a statement. "Our Government has not taken kindly to the unprovoked pronouncements by the Malaysian Prime Minister and is contemplating some retaliatory action," he said.
Therefore, "In your own interest as well as a mark of solidarity with our Nation, we should avoid purchases from Malaysia for the time being," he added.
Prime Minister Mahathir Mohamad's UN General Assembly remarks in late September on the Kashmir conflict had offended many in the Indian government.
"The advisory from the SEA was expected given the sentiment in the Indian palm buying community on the heightened political tension from the war of words. The advisory is a setback for Malaysian CPO and refined product exporters. The advisory confirms how serious India is in retaliating the hostile political comments with trade curbs. Indonesia will stand ready to benefit immediately. Malaysian CPO prices will take hit Tuesday and fears of lower export will return to haunt thoughts of higher stocks of 3 million mt," said Sathia Varqa of Singapore based Palm Oil Analytics.
Palm oil stocks in Malaysia jumped 9.2% to 2.448 million mt in September, the highest in five months, data released by the Malaysian Palm Oil Board (MPOB) earlier this month showed.
Malaysia exported 3.2 million mt of palm products to India from January to September 2019 against 1.9 million mt a year earlier, MPOB data showed.
S&P Global Platts assessed CPO CFR WC India $5 higher than Friday at $546/mt on Monday while CPO FOB Indonesia was assessed unchanged at $521/mt.
