Malaysia's PM defends criticism of India despite palm oil backlash

By Mei Mei Chu
KUALA LUMPUR, Jan 14 (Reuters) - Malaysia is concerned about
India's new curbs on imports of palm oil after a diplomatic row,
Prime Minister Mahathir Mohamad said on Tuesday, but indicated
he would continue to speak out against "wrong things" even if it
costs his country financially.
India, the world's biggest buyer of edible oils, last week
changed rules that traders say effectively ban imports of
refined palm oil from Malaysia, the world's second-biggest
producer and exporter of palm oil after Indonesia. The move came after New Delhi objected to Mahathir's
criticism of India's new religion-based citizenship law. The
94-year-old premier, whose outspoken nature has soured ties with
both India and Saudi Arabia in recent months, earlier accused
India of invading the disputed Muslim-majority region of
Kashmir. As Malaysian palm refiners stare at a massive loss of
business, Mahathir said his government would find a solution.
"We are concerned of course because we sell a lot of palm
oil to India, but on the other hand we need to be frank and see
that if something goes wrong, we will have to say it," he told
reporters. "If we allow things to go wrong and think only about
the money involved, then I think a lot of wrong things will be
done, by us and by other people."
The benchmark palm oil contract FCPOc3 for March delivery
was down 0.9% in afternoon trade.
Reuters reported on Monday the Indian government had
informally instructed traders to stay away from Malaysian palm
oil. Indian traders are instead buying Indonesian crude palm oil
at a premium of $10 tonne over Malaysian prices. India's foreign ministry said on Thursday the palm curbs
were not country specific but that "for any commercial trading,
the status of relationship between any two countries" is
something a business would consider.
India was Malaysia's biggest buyer of palm oil in 2019, with
4.4 million tonnes of purchases. In 2020, purchases could fall
below 1 million tonnes if relations don't improve, Indian
traders say.
To make up for the potential loss, Malaysian officials say
they are trying to sell more to Pakistan, the Philippines,
Myanmar, Vietnam, Ethiopia, Saudi Arabia, Egypt, Algeria and
Jordan.
But replacing the top buyer won't be easy, and that's why
the Malaysian Trades Union Congress, whose members include palm
workers, has urged the two countries to talk things out.
"We wish to implore upon both governments to use all
possible diplomatic channels to resolve this issue putting aside
any personal or diplomatic ego," it said in a statement.
Malaysia's Primary Industries Ministry, supported by the
Ministry of Foreign Affairs, is engaging with its Indian
counterparts to try and sort out the issue, according to a
Malaysian government source aware of the discussions. He
declined to be named as he was not authorised to speak to the
media.
The ministries could not immediately be reached for comment.