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Malaysia's Palm Oil Sector Pays for Prime Minister's Tough Talk on India

Zsombor Peter

   KUALA LUMPUR, MALAYSIA - India's boycott of Malaysian palm oil over
   Prime Minister Mahathir Mohamad's rebuke of New Delhi's handling of
   Kashmir and Muslim migrants may deal a heavy blow to Malaysia's economy
   this year, the more so if it expands to other key commodities.

   But some economists say the nominally punitive move may have as much to
   do with India's growing fixation with correcting its bilateral trade
   deficits in an Asian echo of U.S. President Donald Trump's "America
   First" push.

   India is by far the largest importer of palm oil from Malaysia, the
   world's second largest producer after Indonesia. The versatile fruit
   extract is used in everything from pizza dough to soap and biofuels.

   In October India's top vegetable oil trade body, the Solvent Extractors
   Association, urged its members to stop buying Malaysian palm oil over
   Mahathir's "unprovoked pronouncement" and "in solidarity with our
   nation." To New Delhi's consternation, the prime minister of
   Muslim-majority Malaysia had reproached India for stripping statehood
   from its portion of Kashmir, which also has a Muslim majority, and
   later over legislative amendments that appear to deny Indian
   citizenship to Muslim migrants from some countries.

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