India-Indonesia Current Affairs - 2020

Curbs on Palm oil imports tightened

On April 13, 2020, India tightened its curbs on imports of palm oil. Under the new conditions, the authorisation for imports of palm oil should be accompanied with pre-purchase agreement.


Apart from the pre-purchase agreement, “certificate of origin” has also been made mandatory. This certificate is important to prove where the goods come from. The import licensing of palm oil has been made to 6 months in place of 18 months.

The rules of origin certificate is required for countries with which India has trade agreements. These curbs are being introduced to regulate shipments during lock down.

India’s Imports

India is the world’s largest importer of vegetable oil and buys around 15 million tonnes annually. India primarily imports palm oil from Indonesia and Malaysia. Malaysia produces 19 million tonnes of palm oil a year and Indonesia produce 43 million tonnes of palm oil a year.

The Palm oil had been put to restricted category from Free since the remarks of Malaysian prime minister.

Global Sugar Supply Chains hit globally

The international sugar prices have fell from 15 USD to 12 USD per pound. Also, the Indian Sugar Mills Association (ISMA) has reduced its off-take from mills in the last 15 days. The sugar stock in the wholesale market and retail markets have been sold completely according to ISMA.


The fresh sugar procurement in India has come to a halt. However, new markets are being opened for India. This includes Thailand, Indonesia and Australia. These markets are opening towards India for the following reasons

  • In Thailand, sugar production has been hit by 5 million tonnes
  • Indonesia has decided to allow concessional sugar import from India. This is because, the sugar imports from Thailand in the country are greatly hit.

Current Scenario in India

Indian mills have so far dispatched 3 million tonnes of sugar for export. The maximum admissible export quantity (MAEQ) of sugar is 6 million tonnes. The MAEQ is determined by the Government of India.

This year, 457 sugar mills have begun crushing operation as against 527 last year. The downfall is relatively low as compared to other countries. This is mainly because, GoI has kept agriculture and its allied activities open and free from the lock down.