Indonesia is the world's biggest palm oil producer but its erratic export policies, including the most recent ban announced on April 22, have pushed Indian consumers to increase their dependence on Malaysia, the world's second-largest producer whose output is less than half of its rival.
"Malaysia is the biggest beneficiary from Indonesia's unpredictable policies," said B.V. Mehta, executive director of Mumbai-based Solvent Extractors' Association of India , a vegetable oil trade body.In the first five months of the 2021/22 marketing year, India has bought 1.47 million tonnes of Malaysian palm oil compared to 982,123 from Indonesia, data compiled by SEA showed.
The flip in Indian palm oil imports would upend an established pattern of Indonesian dominance across South Asia. "Refiners commit sales of finished goods in advance and we cannot back out just because raw material is not available," he said.