KUALA LUMPUR: The cancellation of crude palm oil purchases from Malaysia by Indian refiners, following a 20 per cent hike in import taxes, is seen as temporary.
Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said the cancellation of inventory due to the tax hike would also not pose a significant impact.
He added that this is because India has a large population and is the world's largest oil consumer.
"Therefore, I believe that any such cancellation is only temporary, as they remain an important market for our palm oil. Malaysia will continue to be a key partner for India, and we will keep selling high-quality palm oil products.
"In fact, during a meeting with my counterpart in India a few months ago, I expressed Malaysia's commitment to supporting their palm oil industry, including through technology and other areas," he said in a press conference after officiating the Malaysian Palm Oil Forum (MPOF) here today.
When asked whether the country would request the Indian government to reduce the import tax, Johari said Malaysia respects the decisions of every consumer country.
He noted that typically, such requests cannot be made as it is the right of each country to decide on its tax policies.
"I believe every tax issue is related to specific matters in that country, and we cannot interfere with the decisions of other nations," he said.
Previously, Indian refiners cancelled 100,000 tonnes of palm oil orders scheduled for delivery between October and December.
The decision followed New Delhi's recent move to hike the import tax on palm oil and other edible oils by 20 per cent, a move seen as helping local oilseed farmers.
The basic customs duty on CPO, soybean oil and sunflower oil has been increased from zero to 20 per cent, and from 12.5 per cent to 32.5 per cent for refined products.
India typically imports 750,000 tonnes of palm oil monthly, meaning the cancelled orders represent around 13.3 per cent of its average monthly imports.
The country imports palm oil mainly from Indonesia, Malaysia and Thailand.
Meanwhile, Johari said Malaysia is open to trading palm oil with other countries including Russia, the Middle East and Africa.
He added that there are still many opportunities and potential for Malaysia to explore and expand the palm oil industry while promoting its sustainability.
Increased palm oil use, he said, would have a positive impact on producing countries, especially Malaysia.