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Siti Safura Masiron


The Star Online



Sime Darby Plantation can reduce impact of India tensions by exporting from Indonesia

23.10.2019 (The Star Online) - PETALING JAYA: Sime Darby Plantation Bhd is looking at ways to soften the impact of a potential ban by India on palm oil imports from Malaysia.

The group, which has significant presence in Indonesia, told Bloomberg that it was exploring the possibility of exporting its products from Indonesia, if such a ban is imposed.

In an email reply, the group said it could also switch sale offerings between crude palm oil (CPO) and differentiated products to hedge against any impact on export revenue.

The group added that it continued to explore other markets to close any demand gaps.

India is a key market for Sime Darby Plantation, representing about 20% of its total CPO exports last year.

The company’s comments are in view of rising tensions between Malaysia and India over comments made by Malaysian Prime Minister Tun Dr Mahathir Mohamad at the United Nations General Assembly last month.

He was quoted as saying that India had “invaded and occupied” Jammu and Kashmir.

Indian-administered areas of Jammu and Kashmir were previously states in India, which have now become “union territories”.

Dr Mahathir’s statements led to an uproar online, with Indian social media users accusing Dr Mahathir of publicly siding with Pakistan against India in the ongoing dispute over the region.

They called for a boycott of Malaysian tourism, products and services, including airlines.

Earlier this month, Reuters reported that the Indian government was “looking for ways to limit palm oil imports and may place restrictions on other goods from the country”, quoting government and industry sources.

India is the world’s largest importer of palm oil with a total of 8.8 million tonnes of palm oil imported last year – 2.1 million tonnes from Malaysia and 5.98 million tonnes from Indonesia.

The tensions led to Primary Industries Minister Teresa Kok saying that Malaysia was “exploring the possibility” of sourcing raw sugar from India starting next year as a way of enhancing bilateral trade with the country.It has been reported that some Indian refiners have already stopped Malaysian palm oil shipments scheduled for November and December due to fears of potential measures to restrict the imports.