May 18, 2020
Trade between two countries show strong hold since Mahathir’s resignation
Seeing renewed relations, Malaysia is in agreement to import a record trade of 100,000 tons of rice from India for shipment this month and next, in a further sign of improving trade relations between the countries after a diplomatic tiff.
This is the first such purchase reported nearly twice the average annual volume of rice that Malaysia has imported from India since last five years. This deal is the result, as the competing suppliers such as Burma, Cambodia and Vietnam imposed hold on the grains for domestic consumption during pandemic.
Malaysia’s import would help cut the rice stockpiles in India which is the world’s biggest exporter.
“After a long time, Malaysia is making substantial purchases from India,” B.V. Krishna Rao, president of India’s Rice Exporters Association, addressed media.
There is a possibility that Malayaisa’s imports from India could rise to 200,000 tons this year after the latest deals, Rao and executives from three other companies opined.
Since last 5 years, Malaysia has bought around 53,000 tons per year on average from India according to data from the Indian commerce ministry and the total export to Malaysia was recorded as 86,292 tons last year.
In the forefront, India is now offering white rice for between $390 and $400 per ton as compared to other countries who have rated to more than $450, exporters said.
“That is making buying lucrative from India,” said Nitin Gupta, vice-president of the rice business at the agri-trading company Olam India.
“Restriction on exports by Myanmar, Vietnam and Cambodia could have prompted Malaysia’s state-linked rice importer Bernas to source supplies from India”, said Himanshu Agarwal, executive director at Satyam Balajee, India’s biggest rice exporter.
Vietnam, the third-largest rice supplier, fully resumed exports this month, after halting sales from late March and limiting supply in April to make sure it has sufficient food for domestic use during virus pandemic.
The rice deals come against the backdrop of a massive jump in recent imports by Malaysia of other commodities such as sugar from India. India is the biggest buyer of Malaysian palm oil.
Early this year, India enforced restrictions on imports of Malaysian palm oil as a retaliation for then Malaysian PM Mahathir Mohamad’s repeated criticism of certain Indian domestic policies.
“And when this palm oil thing came in, things sort of fell in place for India,” the official said, referring to how India’s tightening of palm import restrictions led to Malaysia signing other deals with the South Asian country.
Malaysia is the world’s second-biggest producer and exporter of the vegetable oil after Indonesia, and India’s restrictions had badly affected its trade.