Malaysia, palm oil exports to India is confident of its demand in South Asia

Malaysia, palm oil exports to India is confident of its demand in South Asia

Malaysia, which sells nearly one-fourth of its total palm oil exports to India, is confident that demand in the South Asian country will remain strong and that both countries can benefit from friendly trade relations that ensure food security for their citizens.

Visiting Malaysian Plantation and Commodities Minister Seri Johari Abdul Ghani stated on Thursday that his country would like to reach an agreement with India to ensure the import of commodities such as rice and sugar while also exporting palm oil and that such an arrangement should continue even if there are restrictions.

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Though he wished for an agreement, Johari believed that even without one, things could still happen, as they do now with rice. Malaysia has been importing non-basmati rice from India via diplomatic channels. However, Johari made it clear that Malaysia does not support “any barter” system and believes it should be based on open market prices. Farmers will be dissatisfied if they do not receive market rates in case there is a surge, he stated.

Support for Atmanirbhar

India purchased approximately 3.7 million tonnes of Malaysia’s 14.8 million tonnes of palm oil exports in 2023 (January-December). Malaysia expects a marginal increase in palm oil exports to 15 mt in 2024, with the same level of shipments to India as the previous year.

Earlier in the day, Johari met with India’s Agriculture Minister, Shivraj Singh Chouhan, and expressed Malaysia’s support for India’s efforts to become “Atmanirbhar” in its edible oil security goals. India has already launched the Oil Palm Mission and will shortly announce the Oilseeds Mission to achieve self-sufficiency.

“Malaysia is ready to provide invaluable assistance in encouraging the expansion of oil palm cultivation. India’s contribution to Malaysia’s oil palm sector cannot be understated. This collaboration will also make a significant contribution to meeting global food security and sustainability goals,” Johari said in a statement.

According to an official statement, oil palm trees account for less than 8% of the total cropland area worldwide but contribute 32% to major seed oil production. As global concerns about climate change and deforestation grow, palm oil is uniquely positioned to meet the rising global demand for edible oils, according to the report.

Commitment to Sustainability

Johari also stated that Malaysia is deeply committed to sustainable palm oil production and adheres to strict environmental standards and sustainable practices. He stated that his country has already decided that no deforestation will occur after 2020 and that no new land will be added to the existing 5.7 million hectares of oil palm plantation.

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Per capita consumption of oils and fats in India has increased from 15.8 kg to 19 kg over the last decade, while global consumption is 30 kg/person. This increase represents an additional 7.34 mt of consumption in India, which is expected to continue as the country’s economy grows.  Johari declined to comment on the repatriation of Zakir Naik, a controversial Indian preacher living in Malaysia.