By NNN-Bernama,
Mumbai : To stem the declining trend of palm oil exports to India, Malaysia has proposed to Indian investors to jointly focus on palm oil downstream activities, rather than merely importing the commodity.
Malaysia is the second largest palm oil producer in the world, with 15.82 million tonnes last year, while India is becoming a major buyer of the commodity, with imports swelling from 1.46 million tonnes a decade ago to 3.69 million tonnes last year.
But, India’s procurement from Malaysia dipped sharply over the last six years, from 2.3 million tonnes earlier to only 510,000 metric tonnes last year.
“There are opportunities to better the situation now if we have strong linkages or joint ventures with Malaysian companies to do downstream products or refinery. These are areas that will create new opportunities rather than we sell the commodity to you,” Minister of Plantation Industries and Commodities Datuk Peter Chin Fah Kui told reporters in Mumbai.
The minister is in the Indian financial hub to launch the two-day Malaysia-India Palm Oil Trade and Seminar, jointly organised by the Malaysian Palm Oil Council and Malaysian Palm Oil Board.
India is the largest importer of Malaysian palm oil after China, the European Union, Pakistan and the United States.
But in recent years palm oil had been a polemic topic in bilateral trade negotiations, because of the high tariffs imposed by India on imports and Malaysia’s reluctance to sell more crude palm oil to Indian companies.
However, this year India eliminated its import duties on crude palm but maintained its 7.5 import tariff on refined palm oil.
“I think we should look at a new paradigm, to create a new synergy whereby we work for a win-win situation. The trade has to be on that sort of basis in the future and not on the sort of exporter and importer type of scenario,” he added.
Besides, the minister also hinted Malaysia may consider exchanging palm oil for rice from India, as Malaysia wanted to create a 500,000-tonne rice stock pile to ensure food security, but did not elaborate further.
“I am here to market palm oil, not to buy rice. I don’t have the mandate to negotiate to buy rice but anyway I will bring it up with the minister (Indian agriculture minister),” he said.
He is expected to meet Sharad Pawar tomorrow in Mumbai.