Buyers cut orders for Malaysian oil

Indian refiners have stopped buying Malaysian palm oil for shipment in November and December fearing New Delhi could raise import taxes or enforce other measures to curb imports from the Southeast Asian nation, five traders told Reuters on Monday.

Lower purchases by India, the biggest buyer of Malaysian palm oil so far in 2019, could lead to higher inventories and put pressure on Malaysian palm oil prices. It could also help rival Indonesia increase its shipments to India.

India is considering restricting imports of some products from Malaysia including palm oil after Kuala Lumpur criticised New Delhi for its actions in Kashmir.

India's government has not made any public remarks about Malaysian palm oil. The Commerce Ministry did not immediately respond to a request for comment on Monday.

"We need clarity before doing business with Malaysia," said a Mumbai-based dealer.

His trading firm was about to buy 5,000 tonnes palm oil on Friday from Malaysia for November shipment but decided not to proceed after reading about potential disruptions. If the government did not provide clarity in coming days, the trader said he would buy from Indonesia.

Malaysian palm oil futures slumped for a second straight day on Monday due to concerns about the possible Indian import restrictions and weakness in related edible oils. "Traders are confused on both sides. They don't know how to plan their shipments," said Sandeep Bajoria, Chief Executive of Sunvin Group, a Mumbai-based vegetable oil importer.

"On the cautious side, buyers are preferring Indonesian shipments," he said.