Malaysian PM stands by Kashmir comment despite India palm oil ban

Mahathir Mohamad describes a boycott of Malaysian palm oil by Indian traders as a 'trade war'.

    Malaysia is the world's second-biggest producer and exporter of palm oil after Indonesia, while India is the top buyer of edible oils [File: Dedi Sinuhaji/EPA]
    Malaysia is the world's second-biggest producer and exporter of palm oil after Indonesia, while India is the top buyer of edible oils [File: Dedi Sinuhaji/EPA]

    Is the world seeing the emergence of yet another trade war? According to Malaysian Prime Minister Mahathir Mohamad, the boycott by Indian traders of one of his country's top exports amounts to just that.

    But despite the unprecedented request by India's top vegetable oil trading body to its members to stop buying Malaysian palm oil, Mahathir on Tuesday stood by his recent comments on the disputed region of Indian-administered Kashmir.

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    Mahathir said he would not retract his criticism of New Delhi's decision to revoke Kashmir's autonomy. 

    "We speak our minds, and we don't retract or change," Mahathir told reporters outside parliament on Tuesday. "What we are saying is we should all abide by resolutions of the [United Nations]. Otherwise, what is the use of the UN?"

    On August 5, India imposed restrictions on people's movements and communications in Kashmir to quell unrest there, calling it an internal matter and criticising countries that have spoken out against the move.

    Mahathir said last month at the United Nations that India had "invaded and occupied" Jammu and Kashmir and asked New Delhi to work with Pakistan to resolve the issue.

    The UN Security Council adopted several resolutions in 1948 and in the 1950s on the dispute between India and Pakistan over Kashmir, including one which says a plebiscite should be held to determine the future of the region.

    Pakistan and India both control parts of Kashmir, but each lays claim to the entire region since the countries gained independence from Britain in 1947.

    India and Pakistan have fought two of their three wars over the region.

    The latest impasse could exacerbate what Mahathir described as a trade war between the world's second-biggest producer and exporter of palm oil and its biggest buyer so far this year.

    Mahathir said Malaysia would study the impact of the boycott called by the Mumbai-based Solvent Extractors’ Association of India and look at ways to address the issue.

    New Delhi has so far refused to comment on the trade dispute with Malaysia.

    'Trade is a two-way thing'

    "This is not the Indian government, so we have to find out how we can communicate with these people, because trade is a two-way thing and it is bad to have what amounts to a trade war," Mahathir said.

    Malaysian palm oil futures slipped on Tuesday over concerns that demand from India would fall.

    India was Malaysia's third-largest export destination in 2018 for palm oil and palm-based products worth 6.84 billion Malaysian ringgit ($1.63bn).

    Malaysia's total exports to India were worth $10.8bn in the fiscal year that ended on March 31, while imports totalled $6.4bn, according to Indian government data.

    Malaysia said last week it was considering raising imports of raw sugar and buffalo meat from India, in a bid to ease the trade tensions.

    India, the world's biggest importer of edible oils, also buys palm oil from Indonesia as well as soybean oil from Argentina and Brazil, and sunflower oil from Ukraine.

    SOURCE: Reuters news agency