KUALA LUMPUR: Malaysia has agreed to import 130,000 tons of raw sugar from India for $49 million, despite an ongoing row over palm oil trade between the two countries.
The amount is a leap from last year’s raw sugar imports from India of 88,000 tons. Malaysia’s sugar producer MSM Malaysia Holdings Berhad (MSM) said it has procured the first quarter of its raw sugar requirement from India for 2020, and is expecting the arrival of three more shipments between January and February.
MSM is the leading sugar refiner in Asia, with annual production capacity of up to 2.25 million tons of refined sugar.
The company operates under the world’s largest palm oil producer FGV Holdings, which is a unit of the Malaysian state-owned Federal Land Development Authority.
MSM Group CEO Khairil Anuar Aziz said in a statement released on Thursday that the company decided to import Indian sugar due to “the acceptable quality and competitive freight cost of raw sugar produced from India.”
India is among the world’s largest sugar producers alongside Brazil and Thailand. “Over 900,000 metric tons of raw sugar were imported in 2019 from various top producing countries, which include India,” said Anuar Aziz.
MSM did not cite the palm oil dispute as a cause for the increase in sugar imports, but sources from Reuters reported that the move was a bid to appease India, which has been urging Malaysia to reduce the trade deficit between the countries.
“These are two large Asian economies that are no strangers to international trade,” said Dr. Oh Ei Sun, a senior fellow with the Singapore Institute of International Affairs.
“Hopefully with this and similar friendly measures the two countries will patch over their differences of opinion and restore their previously cordial relations.”
Earlier this month, India decided to halt its refined palm oil imports from the country, which analysts at the time said could affect Malaysia’s palm oil trade.
The move followed critical comments from Malaysian Prime Minister Mahathir Mohamad over India’s treatments of its minority Muslim population.