*NEW DELHI – Malaysia’s mammoth palm oil sector faces a new threat afterIndian traders were asked to halt purchases amid a diplomatic row overKashmir, piling further pressure on the industry as Europe also planscutbacks.*
The Southeast Asian nation is the second-biggest producer after Indonesiaof the oil, used in everything from food to cosmetics, in a sector longvilified by environmentalists who blame it for fuelling deforestation.
With Western companies reducing use of the commodity as green groupsratchet up pressure, the top two growers have increasingly come to rely ondemand from India, the world’s biggest buyer of edible oils, and China.
But a speech by Malaysian Prime Minister Mahathir Mohamad at the UnitedNations General Assembly last month, in which he said New Delhi had“invaded and occupied” Kashmir, has sparked a backlash in India that couldbadly hit the sector.
There has been sympathy in mostly Muslim Malaysia for Kashmiris after theHindu nationalist government in New Delhi revoked the Muslim-majorityregion’s autonomy in August, and imposed a lockdown to quell unrest.
Kashmir has been split between India and Pakistan since 1947, and hassparked wars and numerous skirmishes between the two countries. An armedrebellion against Indian rule has raged in the valley since 1989.
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 onMalaysian palm oil.
Earlier this week, a major Indian vegetable oil trade body called on its875 members to avoid buying palm oil from Malaysia, noting the governmentwas mulling retaliatory measures.
“In your own interest as well as a mark of solidarity with our nation, weshould avoid purchases from Malaysia for the time being,” said AtulChaturvedi, president of the Solvent Extractors’ Association of India.
*Major market*
It is a blow for Malaysia, as India was the country’s third-biggest marketfor palm oil and palm oil products in 2018, with a value of 6.84 billionringgit ($1.63 billion).
Teresa Kok, the minister who oversees the commodity, scrambled to defusetensions, describing the association’s move as a “major setback” and sayingMalaysia was looking at increasing imports of sugar and buffalo meat fromIndia.
The row is a further hit to the sector in Malaysia after the European Unionannounced plans to phase out palm oil in biofuels by 2030. Malaysia andIndonesia have vowed to fight the move, saying it could damage thelivelihoods of millions of small-scale farmers.
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Despite attempts by some Malaysian officials to calm the spat, calls aregrowing in India for Prime Minister Narendra Modi’s government to curb palmoil imports.
Such a move would signal that “countries gaining economically from Indiawhile criticising the country politically will not have a free runanymore”, Neelam Deo, director of Mumbai-based think-tank Gateway House,told AFP.
*‘We speak our minds’*
Tensions have also risen between India and Turkey after President RecepTayyip Erdogan told the UN General Assembly that Indian-administeredKashmir was “besieged”.
Reports have since said that Modi had cancelled a planned visit to Turkeyas a result, and that India could axe a $2.3 billion order with a Turkishshipyard.
India’s foreign ministry, however, denied that any such visit was planned.
New Delhi has yet to take any formal measures against Malaysia or Turkeybut Bloomberg News reported last week that India was considering placingcurbs on some imports from both countries, citing people familiar with thematter.
Despite the furore, Mahathir has been unapologetic, reportedly tellingjournalists last week: “We speak… our minds and we don’t retract andchange.”
“Sometimes what we say is liked by some and disliked by others,” added thefamously outspoken 94-year-old, known for his acid-tongued attacks on Jewsand the West during a first stint in office from 1981 to 2003.
And with nationalistic anger growing in India, the row appears unlikely toend soon.
“It’s not purely a palm oil issue,” James Chin, a Malaysia expert at theUniversity of Tasmania, told AFP. “It ties in with egos… and nationalism.”-APP/AFP
