The Hindu Business Line : Malaysia hints at palm oil-rice barter

Although there has been an overall increase in edible oil imports, India’s purchases of palm oil specifically from Malaysian have declined substantially in the last six years, largely due to growth in India’s processing industry which has shifted the country’s demand towards crude palm oil sourced mainly from Indonesia.

Although disappointed over the contraction of Malaysian palm oil supplies to India, the Malaysian Minister for Plantation Industries and Commodities, Datuk Peter Chin Fah Kui, asserted that the business community in both the countries could redefine the approach by forming partnerships and strategic alliances. He was addressing delegates at the Malaysia-India Palm Oil Trade Fair and Seminar 2008 here on Thursday.

A strong delegation of Malaysian officials and palm oil industry representatives has accompanied the Minister. Malaysian companies already have joint ventures in Pakistan, Bangladesh and Vietnam, and are not only selling palm oil, but also playing a major role indeveloping downstream activities in the importing countries, he pointed out.

“There are opportunities to explore investments in downstream highervalue-added chain of the oil such as in oleochemicals, pharmaceuticals, processed foods, bulking, speciality products and even consumer brands,” Dr Chin said, adding that the Comprehensive Economic Cooperation Agreement both countries are working on will further nurture and expedite the economic cooperation and trade already built.

Hinting that the countries can examine possibility of barter trade, the minister said Malaysia might be interested in exploring import of food products (like rice) from India in order to augment supplies and control prices, while India can import palm oil through state-owned enterprises fordistribution to the public.

At about 16 million tonnes, Malaysia is currently the world’s second largest producer (after Indonesia) but the largest exporter of palm oil. India is the world’s single largest importer of palm oil with about 3.5 million tonnes, but a substantial part is sourced from Indonesia. Over 300 delegates from the Indian vegetable oil and related industries participated in the seminar organised by Malaysian Palm Oil Council.

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