Refiners slash palm oil purchase from Malaysia fearing duty hike

Indian refiners have stopped buying Malaysian palm oil for shipments in November and December fearing New Delhi could raise import taxes or enforce other measures to curtail imports from Kuala Lumpur, five traders told Reuters on Monday.

Lower purchases by India, the biggest buyer of Malaysian palm oil so far in 2019, could lead to higher inventories and put pressure on Malaysian palm oil prices, but help rival Indonesia in raising its shipments to India.

India is considering restricting imports of some products from Malaysia including palm oil in reaction to the Southeast Asian country’s leader criticising New Delhi for its actions in Kashmir, Reuters reported on Friday.

“Traders are confused on both the sides. They don’t know how to plan their shipments,” said Sandeep Bajoria, chief executive of Sunvin Group, a Mumbai-based vegetable oil importer.''

To be “on cautious side, buyers are preferring Indonesian shipments to avoid any possible impact of higher duties.”

For October most of the import contracts have already been signed, said a Mumbai-based dealer with another trading firm, adding that imports would plunge from November as new contracts are not being signed with Malaysian sellers.