Malaysia is talking to the Indian government and trade officials in a bid to resolve concerns over New Delhi's new palm oil import restrictions, a minister in Kuala Lumpur said on Thursday amid a trade spat between the countries.
India, the world's biggest buyer of edible oils, last week placed curbs on imports of refined palm oil and has informally asked traders to stop importing all kinds of palm oil from Malaysia, the world's second-biggest producer and exporter of palm oil.
Reuters reported on Wednesday, citing sources, that New Delhi could also restrict imports of petroleum, aluminium ingots, liquefied natural gas, computer parts and microprocessors from Malaysia.
However, India's Commerce Minister Piyush Goyal on Thursday said New Delhi had not imposed any curbs on imports from Malaysia and Turkey, and that the government was not contemplating any restrictions on the two countries.
"This year, we foresee more challenges in some of our major markets," Teresa Kok, Malaysia's primary industries minister who is in charge of palm oil, told an industry conference, referring to India's new palm import rules.
Kok said the Indian high commissioner, the ambassador in Malaysia, was one of the people she was in touch with over the issue.
It is "important for us to engage with them further through diplomatic channels and stakeholders," she told reporters on the sidelines of the event. "We will continue to engage."
In some good news for Malaysian palm sellers, Bangladesh's farm minister told Reuters his country was open to buying more from Malaysia if it offers competitive rates.
The South Asian country buys mainly from Indonesia, which is expected to be the biggest beneficiary of the Malaysia-India dispute.
India was Malaysia's biggest buyer of palm oil in 2019, buying 4.4 million tonnes. In 2020, purchases could fall below 1 million tonnes if relations do not improve, Indian traders say.
To make up for the potential loss, Malaysian officials say they are trying to sell more to countries such as Pakistan, the Philippines, Myanmar, Vietnam, Ethiopia, Saudi Arabia, Egypt, Algeria, Jordan, Kazakhstan and Uzbekistan.
But replacing a massive buyer like India will not be easy, and there have been calls for both countries to talk it outputting aside any "personal or diplomatic ego".
The other concern for Malaysia is that following the signing of an initial trade deal between the United States and China on Wednesday, China could buy more soy oil from the United States and less Malaysian palm oil.