KUALA LUMPUR, Nov 14 (Reuters): Malaysia signed a pact on Thursday for exports of palm oil to south Asia next year, amid uncertainty over trade with India after its dealers last month urged a boycott of palm oil from the southeast Asian nation.
In October, India's top vegetable oil trade body told members to stop buying palm oil from the world's second largest producer and exporter of the commodity, after remarks by Malaysia's prime minister on disputed Kashmir stirred anger.
Malaysia has signed a preliminary pact with Dubai-based Hakan Agro DMCC, which is confident of exporting more than 1 million tonnes of palm oil to its core South Asian market, Malaysian minister Teresa Kok said in a statement.
Kok added that she was confident differences with India would "be settled amicably". October's directive to members of the Solvent Extractors' Association of India spelt a blow for Malaysia, the biggest palm oil producer after neighbouring Indonesia.
It followed remarks by Malaysian Prime Minister Mahathir Mohamad to the U.N. General Assembly that India had "invaded and occupied" Muslim-majority Kashmir, which is also claimed by neighbouring Pakistan.
On Aug. 5, Prime Minister Narendra Modi's government had stripped India's portion of Kashmir of its long-standing autonomy, calling the move an internal matter and criticising countries that voiced concern.
Meanwhile another report from Mumbai adds: Indian refiners have resumed buying Malaysian palm oil after a gap of nearly a month and contracted around 70,000 tonnes of shipments in December as Kuala Lumpur has been offering a $5.0 per tonne discount over supplies from rival Indonesia, five traders told Reuters on Thursday.
The resumption in purchases by India, the biggest buyer of Malaysian palm oil this year, could support Malaysian palm oil prices FCPOc3, which are trading near their highest level in two years.
Indian refiners stopped purchases from Malaysia last month.
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