India is likely to import more palm oil from Indonesia amid the government's informal advisory to refiners not to buy the commodity from Malaysia following its remarks on the new citizenship law and Kashmir issue, according to government and industry sources.
On Monday, the commerce ministry held a detailed meeting with edible oil industry stakeholders and asked them informally to avoid purchase of Malaysian palm oil, a government source said.
India, the world's largest importer of vegetable oils, buys nearly 15 million tonne annually. Of this, palm oil comprises 9 million tonne and the rest 6 million tonne is soyabean oil and sunflower oil.
"We import 30 per cent of the palm oils from Malaysia, while 70 per cent from Indonesia. Our refiners can import from Indonesia which produces much higher than Malaysia," the source said.
Indonesia and Malaysia are the two countries which supply palm oils. There would not be any extra cost to import from Indonesia as the product and price is same, the source added.
Malaysia produces 19 million tonne of palm oil in a year, while Indonesia produces 43 million tonne, the trade data showed.
"It does not make any difference for refiners to import palm oils from Indonesia when the product and the prices are same. Why would refiners take risk when the government has informally asked us not to buy," an industry source said.
Instead of palm oils, India can think of increasing import of soyabean and sunflower oils to boost the domestic supply, the source added.
On December 20, Malaysian Prime Minister Mahathir bin Mohamad had reportedly said,"I am sorry to see that India, which claims to be a secular state, is now taking action to deprive some Muslims of their citizenship." "If we do that here, you know what will happen. There will be chaos, there will be instability and everyone will suffer," he said.
Earlier, Mahathir had said in the UN General Assembly that India had “invaded and occupied” Kashmir.