Palm Oil Imports: 30,000 tonnes of palm oil stuck at Indian ports after Malaysia import curbs
Around 30,000 tonnes of refined palm oil are stuck at various Indian ports after the world's biggest edible oil buyer placed curbs on the imports of Malaysian refined palm oil, amid a diplomatic row with key supplier Malaysia. India's restriction on imports of refined palm oil comes after Malaysia criticised scrapping of Article 370 from Jammu and Kashmir and Citizenship Amendment Act
According to Reuters reports, the vessels were reportedly loaded before the restrictions were placed on January 8. Usually, customs officials allow unloading of commodities that are in transit before any change in regulations, sources said.
India announced the restrictions on imports of refined palm oil on January 8 in a bid to help domestic refiners raise their plant utilisation rates, according to industry officials familiar with the matter. India is the world's largest edible oil buyer and in a typical year, India relies on imports for almost all of its supply of the vegoil used in everything from soap to cookies.
However, India this month halted imports from its largest supplier and the world's second-biggest producer and exporter of palm oil. But Malaysia has publicly bridled at New Delhi's move even as India has stepped up orders from Indonesia, according to Refinitiv data. India is now increasing the import of palm oil from Indonesia to meet its domestic demand.
India has been its biggest market for the last five years, and the row sent benchmark Malaysian palm futures to their worst weekly fall in more than 11 years on Friday.
Following India's curb on imports, thousands of tonnes of refined palm oil are delayed or stuck at various Indian ports.
"More than 30,000 tonnes have been stuck at various (Indian) ports. All theses vessels were loaded before the government restricted imports of refined palm oil," said a Mumbai-based vegetable oil dealer, who declined to be named citing company policy.
"Usually customs officials allow unloading of commodities that are in transit before any change in regulation. But in the case of refined palm oil, there is some confusion and that is leading to delays."
Reuters source said the restrictions mean importers will need a licence to buy, a tool that could be used to deny or delay shipments from Malaysia. The person declined to be identified citing the sensitivity of the matter.
Meanwhile, Malaysian Prime Minister Mahathir Mohamad reacted on import curb and said that his government will not take retaliatory trade action against India over its curbs on palm oil purchases from the South East Asian country.
"We are too small to take retaliatory action," Mahathir told reporters in Langkawi, a resort island off the western coast of Malaysia. "We have to find ways and means to overcome that," he added.
Over the past few months, the 94-year-old Malaysian PM had criticised India for scrapping the special status of Jammu and Kashmir and citizenship amendment act.
