On Monday, Malaysian Prime Minister, Mahathir Mohamad said that as India bans any purchase of palm oil from the country, they will not take any trade actions against India in retaliation. The decision of banning the purchase of palm oil comes due to political tiff between the two countries.
According to WWF India, India is the largest user of palm oil, as uses “20% of World’s supply” and 95% of it came from Malaysia. Effective from this month, India has stopped all imports of palm oil from its biggest suppliers and world’s second largest producer, allegedly, due to the comments made by Mahathir criticising India’s domestic policies.
In a conversation with reporters in Langkawi, the Malaysian Prime Minister said “We are too small to take retaliatory action”, Mahathir added, “We have to find ways and means to overcome that”.
The 94 year old Prime Minister has openly criticised Modi lead government’s Citizenship Law, and the actions taken on Kashmir. And on Monday, he did not hold back, he was once again seen criticising the citizenship bill saying, it is “grossly unfair”.
Since the past 5 years, India has been Malaysia’s biggest palm oil importer and now that it will no longer import it from the country, Malaysia will face a huge challenge to find buyer(s) for its palm oil.
The Benchmark Malaysian palm futures declined the most last week, so much so that it was the biggest drop the country saw in more than 11 years. It dropped by almost 10%.
Even though Malaysia is vocal about its criticism, India is not content with Malaysia either as the country has refused to revoke the permanent residential status of Zakir Naik – a controversial Indian Islamic Preacher – who has been living in Malaysia for 3 years now and is facing charges of Hate Speech, and Money laundering in India.
Mahathir said that even if fair trail is guaranteed by the Indian government, Naik still faces the threat of vigilante action. He added that Malaysia will not relocate Naik unless the country is not able to find a third country for Zakir. He said “If we can find a place for him, we will send him out”.
Coming to Palm oil, boycotting imports from Malaysia may not be such a good idea for India either, as 90% of its palm oil used to come from there. Even though the local producers may find it an opportunity which earlier was a difficulty because of the low prices on Malaysian Palm Oil, the producers will have to put in a lot of investment to increase the domestic production to capture India’s demands.