Skip to content 
Search

Latest Stories

Malaysia may emerge as top palm oil supplier to India

Malaysia may emerge as top palm oil supplier to India

INDONESIA's "unpredictable" palm oil export policies may help Malaysia emerge as the dominant supplier to India, the world's top buyer of the edible oil, industry sources said.

Indonesia is the world's biggest palm oil producer but its erratic export policies, including the most recent ban announced on April 22, have pushed Indian consumers to increase their dependence on Malaysia, the world's second-largest producer whose output is less than half of its rival.


Malaysia is positioning itself to take advantage of Indonesia's ban by cutting palm oil export taxes by as much as half, said Malaysia's commodities minister Zuraida Kamaruddin.

The combination of lower export taxes and the Indonesian ban may mean Indonesia's share of palm oil exports to India will fall to 35 per cent in the current marketing year ending on Oct. 31, from more than 75 per cent a decade ago, according to an estimate from Mumbai-based solvent extractors' association of India (SEA), a vegetable oil trade body.

"Malaysia is the biggest beneficiary from Indonesia's unpredictable policies," said B V Mehta, executive director of SEA. "As Indonesia is not in the market, Malaysia is selling more, and at near record high prices."

In the first five months of the 2021/22 marketing year, India has bought 1.47 million tonnes of Malaysian palm oil compared to 982,123 from Indonesia, data compiled by SEA showed.

Trader estimates for May show India imported around 570,000 tonnes of palm oil, with 290,000 from Malaysia and 240,000 from Indonesia.

If Indonesia's export ban stays in place for two more weeks, then India's June palm oil imports could fall to 350,000 tonnes, mostly from Malaysia.

Supply chain protection

The flip in Indian palm oil imports would upend an established pattern of Indonesian dominance across South Asia.

However, Indian oil refiners feel they have to protect their supply chains against policy shake-ups after Indonesia's interventions in the palm oil market since 2021.

"You can't just rely on Indonesia and run a business. Even if Indonesia offers you a discount over Malaysia, one has to secure supplies from Malaysia to hedge against Indonesia's unpredictable polices," a Mumbai-based refiner said.

"Refiners commit sales of finished goods in advance and we cannot back out just because raw material is not available," he said.

But, Malaysia's relatively tight palm oil inventories are a lingering concern following an enduring labour shortage that has slashed plantation yields.

"Malaysia has limited stocks. Many producers in Malaysia are well-sold nearby," said an official with a Malaysian planter with operations across Indonesia and Malaysia.

Malaysia produces roughly 40% of Indonesia's output so it cannot completely replace Indonesian supplies.

Even so, Indian oil consumers are keen to increase Malaysian deals and reduce their reliance on Indonesia.

"Indonesia may lift the ban on exports sometime this month, but there is no guarantee it will not restrict exports again. Malaysia's export policy is far more stable and that's what we want," said an Indian buyer, who declined to be named.

(Reuters)

More For You

JLR Tata

A logo is pictured outside a Jaguar Land Rover new car show room in Tonbridge, south east England.

JLR Q1 sales dip as US tariffs hit exports

Jaguar Land Rover (JLR) reported a 10.7 per cent drop in sales for the April–June quarter, as a temporary pause in shipments to the United States and the phase-out of Jaguar’s legacy models weighed on volumes.

The company, owned by India’s Tata Motors, sold 87,286 units to dealers worldwide during the quarter, compared to 97,755 units in the same period last year.

Keep ReadingShow less
Bangladesh seeks US deal to shield garment industry from tariffs

Workers are engaged at their sewing stations in a garment factory in Savar, on the outskirts of Dhaka, on April 9, 2025. (Photo by MUNIR UZ ZAMAN/AFP via Getty Images)

Bangladesh seeks US deal to shield garment industry from tariffs

BANGLADESH, the world's second-biggest garment manufacturer, aims to strike a trade deal with the US before Donald Trump's punishing tariffs kick in next week, said the country's top commerce official.

Dhaka is proposing to buy Boeing planes and boost imports of US wheat, cotton and oil in a bid to reduce the trade deficit, which Trump used as the reason for imposing painful levies in his "Liberation Day" announcement.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Bond yields ease following Starmer’s support for Reeves

THE COST of UK government borrowing fell on Thursday, partially reversing the rise seen after Chancellor Rachel Reeves became emotional during Prime Minister’s Questions.

The yield on 10-year government bonds dropped to 4.55 per cent, down from 4.61 per cent the previous day. The pound also recovered slightly to $1.3668 (around £1.00), though it did not regain all its earlier losses.

Keep ReadingShow less
Kolhapuri sandal sales surge in India post Prada controversy

Customers shop for 'Kolhapuri' sandals, an Indian ethnic footwear, at a store in New Delhi, India, June 27, 2025. REUTERS/Adnan Abidi

Kolhapuri sandal sales surge in India post Prada controversy

INDIAN footwear sellers and artisans are tapping into nationalist pride stoked by the Prada 'sandal scandal' in a bid to boost sales of ethnic slippers with history dating back to the 12th century, raising hopes of reviving a struggling craft.

Sales are surging over the past week for the 'Kolhapuri' sandals that have garnered global attention after Prada sparked a controversy by showcasing similar designs in Milan, without initially crediting the footwear's origins.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Economy grew 0.7 per cent in Q1 2025, fastest in a year

THE UK economy expanded at its fastest pace in a year during the first quarter of 2025, driven by a rise in home purchases ahead of a tax deadline and higher manufacturing output before the introduction of new US import tariffs.

Gross domestic product rose by 0.7 per cent in the January-to-March period, the Office for National Statistics (ONS) said, confirming its earlier estimate. This was the strongest quarterly growth since the first quarter of 2024.

Keep ReadingShow less