The government on Wednesday curtailed the import of refined palm oil and palmolein, a move seen to be targeting Malaysia, for its unwarranted and incorrect references to the issue of Jammu and Kashmir and the Citizenship (Amendment) Act.
Palmolein is a liquid form of palm oil used as cooking oil.
A government circular in this regard, read that the import of refined palm oil has been amended from ‘free’ to ‘restricted’.
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The circular issued by the Ministry of Commerce and Industry, only restricts the import of refined palm oil and not the import of crude palm oil.
Malaysia is the main supplier of refined palm oil. Hence this circular doesn’t directly name Malaysia, but indirectly targets them.
On the other hand, Indonesia, the largest supplier of crude palm oil is expected to benefit from this move.
According to industry sources, Malaysia overtook Indonesia as the largest supplier of refined palm oil in 2019.
Also, the government had informally asked the traders to restrict their imports from Malaysia in recent times before this circular came into effect.
They also add that the immediate effect of this move was an increase in the prices of palm oil.
This move is also expected to benefit domestic oil refiners who were under tremendous losses.
Palm oil is crucial for the Malaysian economy as it accounts for 2.8 % of gross domestic product and 4.5 % of total exports.
Palm oil accounts for nearly two-thirds of India’s total edible oil imports. The country buys more than 9 million tonnes of palm oil annually, mainly from Indonesia and Malaysia. Indonesia is the world’s biggest producer of palm oil, followed by Malaysia.
It was only in September that the Malaysian Prime Minister Mahathir Mohammad had said that Jammu and Kashmir were Indian invaded Jammu and Kashmir and his recent unwarranted comments on the issue of Citizenship (Amendment) Act has also not gone down well with the government.