Malaysia urges India to ease rice, sugar export curbs amid supply concerns

India is a key supplier of rice, sugar, and onions for Malaysia, in turn, Malaysia is the second-largest exporter of palm oil to India after Indonesia

Malaysia has requested India to ease export restrictions on essential farm goods such as rice and sugar, according to Malaysia's Minister for Plantation and Commodities, Johari Abdul Ghani. Speaking on Thursday at an industry conference in New Delhi, Abdul Ghani highlighted the adverse impact of India's export curbs on Malaysia.

"If India opens up, it will be beneficial for Malaysia," Abdul Ghani said. Malaysia, a significant exporter of palm oil to India, finds itself in a challenging position due to India's protective measures. 

India is the world's largest exporter of rice and onions and the second-largest exporter of sugar. The country imposed these restrictions in 2023 to control local prices ahead of the18th Lok Sabha elections. These sudden curbs have disrupted Malaysia's supply chain, given its reliance on India for these commodities.

As earlier reportd by Business Standard, the Indian government is likely to cut the floor price for Basmati rice exports. The government is also expected to replace the 20 per cent export tax on parboiled rice with a fixed duty on overseas shipments, as well as, lower basmati rice's minimum export price (MEP) to $800-$850 a metric ton from $950 a ton.

These efforts are anticipated to boost shipments of rice as the local inventoris reach a record high in the country. 
 

Impact on India-Malaysia trade relations

India's status as a key supplier of rice, sugar, and onions is crucial for Malaysia, which in turn, is the second-largest exporter of palm oil to India, following Indonesia. The export restrictions have prompted Malaysia to push for more lenient trade policies from India to ensure a stable supply of these essential goods.

In a potential move to address these concerns, Indian government sources have indicated that New Delhi might reduce the floor price for basmati rice exports and replace the 20 per cent export tax on parboiled rice with a fixed duty on overseas shipments. This comes as India's rice inventories have surged to a record high.

Previous export requests and supply needs

Earlier this year in March, Malaysia requested an additional 500,000 metric tonnes of white rice from India, supplementing the 170,000 tonnes already allocated for the year. This request highlighted Malaysia's significant reliance on rice imports, with annual consumption at 2.5 million metric tonnes and an average imported supply of 750,000 tonnes, according to state-run rice importer Bernas.

Additionally, in January, Malaysia had also requested 100,000 metric tonnes of onions from India through a government-to-government arrangement.

In related trade developments, Uttar Pradesh Chief Minister Yogi Adityanath announced on Friday that the state would export 40 tonnes of mangoes to Japan and Malaysia this year. Notably, this marks the first time in 160 years that Lucknow's Dussehri mangoes are being exported to the USA, indicating a broader effort to diversify and expand agricultural exports.