INDIA’S decision to restrict imports of refined palm oil will not have a significant impact on local prices for the commodity, which is enjoying a rebound, said a planters group.

The Malaysian Agriculture Producers Association (Mapa) told The Malaysian Insight demand for the edible oil is growing worldwide and Malaysia has other markets for the commodity.

“We don’t depend on India and refined palm oil exports only. Prices for fresh fruit bunches and CPO (crude palm oil) are affected by a multitude of factors and not just one,” said Mapa director Mohamad Audong.

Mapa is a trade group that represents palm oil, rubber, coconut and cocoa planters of all sizes, which include giants such as Sime Darby, Felda and Kuala-Lumpur-Kepong.

“The bigger factor is that stockpiles are going down and demand is still stable,” said Mohamad.

Crude palm oil (CPO) prices rose starting from November last year to RM3,043 per tonne yesterday, according to the Malaysian Palm Oil Board, compared to an average of RM2,000 per tonne for most of 2018 and 2019.

India is Malaysia’s largest customer for palm oil products. In 2018, exports to the subcontinent totalled RM6.9 billion.

In the same year, Malaysia exported more refined palm oil or processed palm oil (PPO) such as palm olein and palm stearin than it did crude palm oil (CPO).

About 13.1 million tonnes of PPO were exported in 2018 compared to 3.39 million tonnes of CPO.

On Wednesday, India’s commerce ministry announced restrictions on refined palm oil products in a bid to help its own local vegetable oil millers.

Mumbai-based trade group, the Solvent Extractors’ Association of India had previously sought government measures to support domestic oilseed crushers against cheaper refined palm oil imports.

“India should only import CPO to allow for the better utilisation of the domestic refining capacity. It’s a step in the right direction,” president Atul Chaturvedi told Bernama.

India relies on imports for 70% of its edible oil requirements. Palm oil from Indonesia and Malaysia constitutes almost two-thirds of its annual vegetable oil imports of 15 million tonnes.

New Delhi, effective this month, reduced the import duty on CPO to 37.5% from 40%, and 45% from 50% for refined palm oil.

Local refiners had asked for a higher duty differential between CPO and refined products. – January 10, 2020.