KUALA LUMPUR (Dec 11): India is expected to buy more Malaysian palm oil in the near term after its import contracted by 60% in October following its import tax hike on refined palm oil from Malaysia.

Deputy Primary Industries Minister Datuk Seri Shamsul Iskandar Mohd Akin said India raised the import tax on refined palm oil from Malaysia for six months starting Sept 4 to protect and spur its palm oil refining industry and reduce dependence on vegetable oil imports.

This led to palm import duty to increase to 50% (from 45%), and Indonesia also saw a similar rise for its palm oil, he said during a question-and-answer session at the Dewan Negara today.

He was responding to a question from Senator Datuk  A. Kesavadas Nair, who wanted to know about the implications of India’s move to reduce purchases of Malaysian palm oil.

Indian refiners reduced purchases from Malaysia last month, fearing New Delhi could raise import taxes or enforce other measures to curb imports after Kuala Lumpur criticised New Delhi for its actions in Kashmir.

Shamsul said Malaysia’s exports of palm oil to India dropped 60% to 219,956 tonnes in October from 550,452 tonnes in September.

Source : The Edge Markets