India key mkt despite import duty hike: Malaysia Palm Oil Council Chief
09/10/2024 (Business Standard) - Malaysia remains optimistic about palm oil exports to India despite recent import duty hike, with the Malaysian Palm Oil Council (MPOC) Chairman Dato Carl Bek Nielsen emphasizing the long-standing trade relationship between the two countries.
In an interview to PTI, Nielsen stressed that India, being the world's largest palm oil importer, continues to be an "incredibly important market" for Malaysian palm oil.
He pointed out that such tariff adjustments have occurred in the past and are part of the normal trading relationship between the two countries.
"This has been done before. Duties have been raised, and duties have been reduced, and we will see that this pattern will repeat itself in the future," Nielsen said.
He said that the council's approach would be based on long-term partnership rather than "short-term knee-jerk reactions." He also added that the council is "not worried" about the tariff changes because there are other countries which would want to buy Malaysian palm oil if the shipments to India gets reduced.
The MPOC chairman projected an optimistic outlook for palm oil production in Malaysia, forecasting output to reach at least 19-19.2 million tonnes in 2024, marking a substantial increase from the previous year's figures.
Asked about the potential impact on demand due to India's push for domestic oilseed cultivation, Nielsen said, "I don't see it as a problem," as India's growing population and rising affluence levels would potentially increase vegetable oil demand.
On the sustainability concerns, Nielsen highlighted Malaysia's leadership in sustainable palm oil production and noted that there is increased awareness among Indian consumers, particularly the younger generation, regarding sustainably-produced products.
"People value the aspect of sustainability so much more today," he observed, expressing optimism about the future of sustainable palm oil in the Indian market.
The MPOC chairman also dismissed health concerns surrounding palm oil, describing such criticisms as "misleading allegations." "Palm oil is a perfectly healthy and versatile vegetable oil source which has fed billions of people for the last 100 years," he stated, while advocating for moderate consumption of all food products.
Characterizing India as a "very price elastic market," Nielsen explained that demand fluctuates based on price changes. Despite this price sensitivity, he predicted that India would remain among the top two importers of palm oil globally in the coming years.
The council is reportedly engaged in dialogues with several Indian companies to enhance the perception and acceptance of palm oil among Indian consumers, though specific details of these collaborations were not disclosed.
When asked about future price trends, Nielsen exercised caution, suggesting that year-on-year supply growth might not match historical levels, potentially leading to tighter supply coverage in global markets in the future.
The Malaysian Palm Oil Council (MPOC) is a key organization representing the palm oil industry in Malaysia, one of the world's largest producers of palm oil. The council works to promote Malaysian palm oil and its products globally.