Amid the palm oil import row, Malaysia's top refiner says it will 'buy more Indian sugar'

Malaysia's top sugar refiner said that it will increase purchases of the commodity from India, news agency Reuters reported on Thursday.

The latest development comes amid the ongoing diplomatic row in which, India decided to put a curb on palm oil imports from Malaysia after the southeast Asian country's Prime Minister Mahathir Mohammed spoke out against the recent policies of India including abrogation of Article 370 which critics say discriminate against Muslims.

According to the Reuters' report, MSM Malaysia Holdings Berhad will buy 130,000 tonnes of raw sugar from India worth 200 million ringgit ($49.20 million) in the first quarter.

In 2018, the company bought around 88,000 tonnes of raw sugar from India.

Also read | Malaysian PM Mahathir Mohamad takes a dig at India over palm oil import row

MSM is the sugar refining arm of the world's largest palm oil producer, FGV Holdings, which is a unit of Malaysian state-owned Federal Land Development Authority or Felda.

In the Kuala Lumpur summit that took place in December 2019, the Malaysian prime minister had criticised the new citizenship act and government's move on Jammu and Kashmir.

New Delhi reacted to Mohamad's comments with the Ministry of External Affairs issuing a statement on the same. 

The MEA called Mohamad's remarks as "factually inaccurate" and said that the Malaysian Prime Minister, "has yet again remarked on a matter that is entirely internal to India," the statement read.

Now, the Indian palm oil importers have effectively stopped all purchases from Malaysia following a diplomatic spat.

As Malaysian palm refiners stare at a massive loss of business, Mahathir assured his country that his government would find a solution.

India is the world's biggest buyer of edible oils and Malaysia is the second-biggest producer and exporter of palm oil after Indonesia.

India is also Malaysia's biggest buyer of palm oil in 2019, with 4.4 million tonnes of purchases. Now, in 2020, purchases could fall below 1 million tonnes if relations don't improve.

(With inputs from agencies)