31/10/2012 (Hindu Business Line) - Malaysian palm oil exports to India will touch a record high of over two million tonnes in calendar 2012.

The export duty cut announced by Malaysia from January 1 may prompt India to buy more from the second-largest palm oil producer next year. “India is a traditional market, where palm oil exports are growing fast. We expect our exports to cross two million tonnes this year” said Lee Yeow Chor, Chairman, Malaysian Palm Oil Council (MPOC).

He was speaking on the sidelines of Malaysian Palm Oil Trade Fair and Seminar 2012, organised by MPOC, on Monday.

Till September-end, the Malaysian palm oil exports to India registered a 58 per cent growth at 1.84 million tonnes (mt) over 1.11 mt in the corresponding period a year ago.

In 2011, exports stood at 1.66 mt. Exports have doubled in the past five years. B.V. Mehta, Executive Director, Solvent Extractors Association of India, expects further rise in Malaysian oil palm shipments to India next year on duty cuts and abolition of quotas.

“The move will benefit buyers in India as it will give them an opportunity to evaluate where they will get a better price. This is provided Indonesia does not change its present duty structure,” Mehta said.

India currently buys 20 per cent of its requirement from Malaysia and the rest from largest producer Indonesia.

“We expect that ratio to change going forward,” Mehta said.

Malaysia is looking at traditional large buyers such as China and India to drive its exports as its palm-based products face negative labelling in countries such as France.

The non-governmental organisations in Europe and Australia have stepped up campaign against palm cultivation on environmental grounds. Terming the stance adopted by Europe and Australia as an unfair trade practice, Malaysian Minister for Plantation Industries and Commodities Bernard Dumpok said that his Government is looking to get into a dialogue and strengthen the existing partnership with these countries, especially France.

“Though the prices are not upbeat over the past few weeks, demand is quite strong” said Dumpok.

Palm oil prices, which have crashed by about 30 per cent in the past few months, have led to an inventory build-up in Malaysia. The country had stocks of 2.48 mt as of end September and its storage capacity stood at 5.2 mt, Dumpok said.