Barter deal with India on the cards10 April 2001 (Business Times) - MALAYSIA is close to sealing acounter-trade deal with India involving the exchange of 100,000 tonnes oflocal palm oil worth US$30 million (US$1 = RM3.80) for participation bythe latter's companies in a double-tracking rail project.
An industry source said discussions are expected to be wrapped up and anagreement finalised when Malaysian and Indian ministers meet in New Delhion April 22.
"Payment for the railway contract will be offset by shipments of palm oil.. . .about 100,000 tonnes or US$30 million worth, depending on market price,"the source told Business Times yesterday.
Details of the arrangement will be worked out when Primary IndustriesDatuk Seri Dr Lim Keng Yaik meets his Indian counterpart, he said.
Dr Lim and Indonesian Trade Minister Luhut Pandjaitan are jointly visitingIndia as well as China to discuss better cooperation in palm oil trade.
It is the first time that the world's top two palm oil producers aremounting a joint mission.
Malaysia has identified India and China, both of which have expertise inrail projects, as candidates for a barter trade arrangement.
They are two of the world's biggest buyers of the commodity, consistentlyimporting over 2 million tonnes in the past several years.
The source said the counter-trade arrangements are expected to materialiseas soon as government agencies of the two countries become involved.
The Indian Minerals and Metals Trading Corp, a government agency, hasshown interest in purchasing palm oil from Malaysia due to low domesticvegetable oil production, he added.
To facilitate this, the Indian Government has tasked the Indian RailwayInternational to participate in the project to double-track the railnetwork in Peninsular Malaysia, he said.
Malaysia had said last month that it was negotiating a deal with severalcompanies from China, India and the US.
US' General Electric International is expected to supply 20 high-powereddiesel-electric locomotives, while Indian companies will be involved inthe northern portion of the project (from Kuala Lumpur to Butterworth andthe East Coast), and China the south (Seremban to Johor Baru).
There will be minimal bureaucratic intervention in the negotiations whichwill be pursued on a fast-track basis, the source added.
"It will be a straight-forward deal. . . . done on a per project basis.
The Government won't be setting up a separate agency to facilitate thearrange-ment," he said.