* India on Wednesday put curbs on refined palm oil imports
* Malaysia refined palm body says it will lose market share
(Adds details, quotes from paragraph 3 to 13)
By Mei Mei Chu
KUALA LUMPUR, Jan 9 (Reuters) - India's restrictions on
imports of refined palm oil will lead to a loss of market share
for Malaysia and spark a price war with rival supplier,
Indonesia, a Malaysian industry association said on Thursday.
India, the world's biggest edible oil buyer, issued a
notification on Wednesday amending imports of refined palm oil
to "restricted", a move that industry sources said amounted to
an effective ban.
The move was seen as punishing Malaysia, India's main
supplier of refined palm oil, for criticism of its policies by
Mahathir Mohamad, the 94-year-old outspoken prime minister of
Muslim-majority Malaysia. Indonesia is the world's biggest
exporter of crude palm oil. The Palm Oil Refiners Association of Malaysia (PORAM) said
the move meant Malaysia would now have to compete on crude palm
sales to India, where Indonesia has traditionally been more cost
competitive.
"This puts Indonesia and Malaysia at loggerheads. There will
be a price war between Indonesia and Malaysia, and we are at the
losing end," said PORAM Chairman Jamil Haron told Reuters.
"We can still sell crude palm oil, but now we need to
compete with Indonesia."
Haron said the restrictions on refined palm oil could be in
the form of quotas and more regulations.
Malaysia last year overtook Indonesia as India's biggest
palm oil supplier after it won a lower duty for refined palm oil
imports. The Southeast Asian neighbours account for 85% of the global
palm oil production. Palm oil is Malaysia's biggest agricultural
export, accounting for 2.8% of its gross domestic product and
4.5% of total exports.
A Kuala Lumpur-based trader, who did not want to be named
citing company policy, said Malaysia's exports would start
falling from end-January after current contracts end.
Malaysia exported an estimated 3.9 million tonnes of palm
oil to India in 2019. Of this 2.04 million tonnes was palmolein
which is used as a cooking agent, according to Refinitiv data.
PORAM members include top industry players including Sime
Darby Plantation SIPL.KL , Cargill Palm Products, FGV
Refineries, IOI Edible Oils and Wilmar Edible Oils.
Malaysian Palm Oil Association Chief Executive Nageeb Wahab
said the curbs on refined palm oil exports would benefit Indian
refiners.
Mahathir said in October India "invaded and occupied"
Kashmir, a disputed mainly Muslim region also claimed by
Pakistan. Last month, he said India was stoking unrest with its
new religion-based citizenship law that excludes Muslims.