KUALA LUMPUR • Malaysia's top sugar refiner has said it will increase purchases of the commodity from India, which according to two sources is part of efforts to placate New Delhi amid an ongoing spat over palm oil imports.
MSM Malaysia Holdings will buy 130,000 tonnes of raw sugar from India worth RM200 million (S$66.4 million) in the first quarter, the company told Reuters.
It bought around 88,000 tonnes of raw sugar from India last year.
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.
The company did not cite the palm oil dispute as a reason for the increase in purchases.
But the two sources, who are familiar with discussions between the company and the government on the purchase, said it was a bid to appease India, which has been urging Malaysia to reduce the trade deficit between the countries.
India, the world's largest edible oil buyer, this month effectively halted Malaysian palm oil imports, apparently to retaliate against Prime Minister Mahathir Mohamad's comments criticising Delhi over its policy on Kashmir.
Malaysia has said it will look to other markets to sell more palm oil but that may not be easy as India has been the biggest buyer of Malaysian palm oil for the past five years, purchasing 4.4 million tonnes in 2019.
Malaysia's exports to India were worth US$10.8 billion (S$14.6 billion) in the fiscal year that ended on March 31, while imports totalled US$6.4 billion.
Last year, Malaysia imported a total of 1.95 million tonnes of raw sugar, data from the International Sugar Organisation shows. It typically buys more from Brazil and Thailand than from India.
India, the world's biggest sugar producer, is struggling with a surplus. Its exports are expected to rise to a record 5 million tonnes for the 2019/2020 season.
MSM said it was expecting the arrival of three shipments of raw sugar from India between January and February.
"This is a very good move. It will help India in increasing sugar exports," Mr Praful Vithalani, president of the All India Sugar Trade Association, told Reuters, referring to MSM's move to buy more of the commodity from India.
REUTERS
