India to remain palm oil buyer for now, but Malaysia must not be complacent

India will remain the main export destination for the world's top largest palm oil producers -- Indonesia and Malaysia, for the foreseeable future given the time taken for India to get its agriculture sector upgraded and modernised, Palm Oil Analytics owner and co-founder Dr Sathia Varqa said.

He said the country's agriculture sector is heavily dependent on rain to feed the crops.

"Palm requires plenty of rain to produce optimum yields and the absence of rain for more than two months will severely reduce yields. This will increase cost (of production)," he told Bernama.

Sathia also said that India would embark on a self-sufficiency path given its high dependency on imports costing billions of US dollars and the statement from the prime minister reflected the urgency given the massive deficit the country is facing from the economic challenges made worse by the COVID-19 pandemic.

"But most importantly, Malaysia cannot be complacent and it needs to continue expanding its current market presence, strike bilateral agreements, deepen research and increase collaboration," he stressed.

Yesterday, Bernama reported that the Indian Prime Minister Narendra Modi has asked farmers in the country's northeastern states to develop oil palm plantations to serve an "assured market" for the imported commodity.

He was advised by agricultural scientists and economists on the potential of oil palm plantations in the northeast region that would help India's drive for self-sufficiency.

"I request all state governments (in the northeast) to develop a palm olein mission in their respective states," Modi said via a video conference to lay the foundation stone for a water supply project in the state of Manipur.

Indian trade group which represents the oilseed crushers, Solvent Extractors' Association (SEA), applaud Modi's call, saying that it would reduce imports.

SEA president Atul Chaturvedi said cultivable area for oil palm plantations would grow as the issue has now received attention at the highest level of the government.

India has identified about two million hectares of land that is suitable for oil palm cultivation. This can yield up to eight million tonnes of palm oil.

Among the states that have been identified are Arunachal Pradesh, Assam and Mizoram in the northeast.

Meanwhile, Malaysian Palm Oil Board director-general Dr Ahmad Parveez Ghulam Kadir said while Malaysia hoped that India would continue to buy its palm oil, the country is happy to assist the Indian government technically in their efforts to cultivate oil palm using technical expertise on good agricultural practices, as well as on the sustainable development of palm oil.

Ahmad Parveez however said that the climate conditions in India may make their efforts to increase palm oil productivity a real challenge.

-- BERNAMA