Turn of the tide? Easing of India’s safeguard duty may point to revival of palm oil imports from Malaysia
Malaysia’s palm oil exports to India falling sharply since September 2019
India will not be extending the bilateral safeguard duty on some palm oil imports from Malaysia (The New Indian Express). New Delhi slapped a 5% safeguard duty on refined palm oil imports from Malaysia in September 2019, raising the customs duty to 50% for six months. This move was aimed at protecting domestic refiners. India’s palm oil imports from Malaysia have fallen significantly since then (see chart above) amid rising political tensions between the nations. January imports tumbled 66% MoM to a mere 47kt after India switched refined palm oil and olein from “Free” to “Restricted” import status. A reduction of safeguard duties may signal a thaw in the bilateral relations, leading to a revival of palm oil shipments from Malaysia to India. However, global demand for commodities has been hit short term by the on-going COVID-19 outbreak.