Cheaper Indonesian palm oil cuts Malaysia's exports to India

Cheaper Indonesian palm oil cuts Malaysia's exports to India

Agence France-Presse, Kuala Lumpur

Malaysian crude palm oil (CPO) exports to India have nearly
halved since 2001 and are expected to dip further next year due
to lower pricing by rival Indonesia, a report said on Tuesday.

CPO prices are hovering around 1,850 ringgit (US$487) a tone
while Indonesian palm oil is shipping at a discount of more than
380 ringgit, the Business Times said.

"In 2001, India bought two million tones of Malaysia's palm
oil. Now it has dipped to the 1.4 million-tone mark," Primary
Industries Minister Lim Keng Yaik was quoted as saying.

"Unless Malaysia's CPO price is more competitive, we will
continue to lose market share," he warned.

Lim said the drop was attributed to a shift in Indonesia's
strategy from exporting mostly processed palm oil to exporting
mostly crude palm oil. CPO now accounts for 90 percent of its
exports of the commodity.

At the same time, India has also trimmed purchases of
processed palm oil and increased uptake of CPO to bolster
domestic refining activities, he said.

India, which accounts for some 15 percent of Malaysia's palm
oil export, has been the biggest palm oil buyer for the past
decade until it was overtaken by China which imported 1.8 million
tones last year.

India's imports shrank to 1.6 million tones in 2002 from 2.38
million just three years ago.

Malaysia is the world's largest palm oil producer, accounting
for about half of global output.

The Business Times quoted an analyst as saying that Malaysia
need not be alarmed because increasing purchases from China and
growing markets in countries such as Vietnam and Bangladesh would
offset the drop in exports to India.