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Why Palm Oil became important between India and Malaysia

  1. The World Economic Forum Meet will held in Davos, Switzerland from 21 to 24 January.
  2. It is discussed that on the sidelines of this meeting, Malaysia’s Commerce Minister Darrell Leiking and India’s Commerce and Industry Minister Piyush Goyal can meet.

According to the news agency Reuters, a spokesman for the Government of Malaysia has given this information. However, according to Reuters, the Commerce Ministry official has denied plans to have such a meeting due to a busy schedule.

The meeting is being discussed because after the statement of Malaysia’s Prime Minister Mahathir Mohammad against India, there is a commercial confrontation between the two countries at the center of which – palm oil i.e. palm oil imported from Malaysia in India .

Relations between the two countries have come under strain following Prime Minister Mahathir Mohammed’s statement on the Indian side of neutralizing Article 370 granting special status to Jammu and Kashmir and introducing a new citizenship law (CAA).

Relations between India and Malaysia started coming in from September last year. In the UN General Assembly, Mahathir Mohammad said that despite the proposal of a united nation, India has occupied Jammu and Kashmir.

India rejected it and said that Mahathir’s statement is not based on facts. Since then, there was a discussion that the Government of India can take strict action against Malaysia.

After this, the business of palm oil came into the news and there was talk of tension between the two countries on the import of palm oil.

At the same time the Solvent Extractors Association of India (SEA) issued a consultation to its 875 members, advising them to avoid buying palm oil from Malaysia. The reason behind this was the tension of the two countries.

Another Malaysian statement:

Even after this, the attitude of Malaysia did not change and Prime Minister Mahathir once again gave a displeasing statement to India.

In December last year, Mahathir Mohammad expressed concern about the CAA. He had said, “I feel very sorry to see that India, which claims to be secular, is denying citizenship to some Muslims. People are already dying because of this law, so now to implement it What is the need when everyone has been living together as a citizen for almost 70 years. “

In India too, protests are being held that the CAA is discriminatory on religious grounds. However, it is also being supported. India again termed Mahathir’s statement as ‘wrong on the basis of facts’ and asked him to refrain from speaking on India’s internal affairs.

Importance of palm oil:

Malaysia is the second largest palm oil producer and exporter in the world after Indonesia. Palm oil is used all over the world, from cooking to biofuels, noodles, pizza flour and lipstick.

Till 2019, India was the biggest buyer of Malaysia’s palm oil and according to official Malaysian figures, the trade between the two was over 4 million tonnes.

BV Mehta, executive director of the Solvent Extractors Association of India, says that since Mahatir Mohammed’s statement on Kashmir, many of his members have started doing business with Indonesia cautiously.

BV Mehta said, “It seems to us that the Indian government may impose tariffs (import duties) or other restrictions due to the ongoing tension between the two countries.” We do not want to get caught in the middle of all this.

This change is also reflected in the recent data. However, there may be other reasons behind the decrease in exports from Malaysia such as increase in export tax. Imports of palm oil from Malaysia in India fell from 310,648 tonnes to 138,647 tonnes in September 2019. In a report on 15 January, the Times of India also wrote to an unknown source that India may also ban import of microprocessors after palm oil.

Economic response

Experts believe that this step of India is like answering on an economic level. China generally adopts this method.

A report appeared in the Times of India on January 9, wrote, “India has lost its patience considering Mahathir Mohammed’s statement to be provocative and it seems that India could impose some sanctions after meeting Muslim countries of Malaysia in Kuala Lumpur is.”

On January 15, the editor of foreign affairs in the English newspaper Mint, Elizabeth Roche wrote, “As India’s economic dominance grows, it will ban itself for countries that are not sympathetic to their concerns and core interests.” Is preparing Former Ambassador

Vivek Katju wrote in the Hindi newspaper Hindustan on January 16 that Mahathir had “ignored the first principle of international relations” by “interfering” in India’s “internal affairs”.

Speaking to Mint on 15 January, former Foreign Ministry official Kanwal Sibal said that the move was “a way of showing displeasure over the statements of Mahathir” as he considered it against India’s “core national interests”.

Malaysia’s answer:

Thousands of farmers in Malaysia depend on exports of palm oil for their livelihood and Mahathir Mohammad has maintained that his government has said that his government will find a solution.

The Malayalam daily Mail in Kuala Lumpur made a statement on January 14 quoting Mahathir Mohammad, “Of course we are worried about this because we sell a lot of palm oil to India. But, on the other hand we need to speak even if something goes wrong. If we allow the wrong things to happen and just think about the money then a lot of things will go wrong. ”

The Trade Union Congress of Malaysia appealed to both countries to resolve the matter diplomatically. Malaysia’s primary industry minister Teresa Kock said on 16 January that it was necessary to connect India with diplomatic channels with relevant stakeholders and businessmen.

According to some media reports, Malaysia is trying to sell palm oil in other countries, but it will not be easy to replace India.

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