DM MONITORING
KAULA LUMPUR: Malaysia’s mammoth palm oil sector faces a new threat after Indian traders were asked to halt purchases amid a diplomatic row over Kashmir, piling further pressure on the industry as Europe also plans cutbacks.
The Southeast Asiaan nation is the second-biggest producer after Indonesia of the oil, used in everything from food to cosmetics, in a sector long vilified by environmentalists who blame it for fuelling deforestation.
With Western companies reducing use of the commodity as green groups ratchet up pressure, the top two growers have increasingly come to rely on demand from India, the world’s biggest buyer of edible oils, and China.
But a speech by Malaysian Prime Minister Mahathir Mohamad at the United Nations General Assembly last month, in which he said New Delhi had “invaded and occupied” Kashmir, has sparked a backlash in India that could badly hit the sector. There has been sympathy in Malaysia for Kashmiris after the Hindu nationalist government in New Delhi revoked the Muslim-majority region’s autonomy in August, and imposed a lockdown to quell unrest.
Mahathir’s comments prompted calls for Indians to shun Malaysian products — with social media users posting angry messages alongside the hashtag #BoycottMalaysia — while rumours swirled New Delhi may hike tariffs on Malaysian palm oil.
Earlier this week, a major Indian vegetable oil trade body called on its 875 members to avoid buying palm oil from Malaysia, noting the government was mulling retaliatory measures.
“In your own interest as well as a mark of solidarity with our nation, we should avoid purchases from Malaysia for the time being,” said Atul Chaturvedi, president of the Solvent Extractors´ Association of India. Tensions have also risen between India and Turkey after President Recep Tayyip Erdogan told the UN General Assembly that Indian occupied Kashmir was “besieged”.
Reports have since said that Modi had cancelled a planned visit to Turkey as a result, and that India could axe a $2.3 billion order with a Turkish shipyard.
