For the first time, Malaysia has struck a deal by which a state agency would supply palm oil seeds to an Indian company.
Malaysian state agency Sawit Kinabalu Group said on Tuesday it has supplied 1.5 million palm oil seeds to Indian consumer goods firm, Patanjali Group, as part of a five-year contract ending in 2027.
The contract was signed by Sawit Kinabalu Group’s seeds subsidiary, which has an annual capacity to process 10 million palm oil seeds.
“We have a five-year contract signed with Patanjali Group for supplying 4 million palm oil seeds. We have delivered 1.5 million seeds so far,” said Zurainy, General Manager of the group’s seeds unit.
Apart from supplying seeds, the company provides advisory services, agronomist site visits and monitoring of planted seed mortality, the official said.
The Patanjali Group plans to set up a palm oil mill in Northeast India, expected to be commissioned by 2026.
Although Malaysia is one of the major suppliers of palm oil to India, the central government is now encouraging domestic cultivation of palm oil to reduce its import dependence.
India currently has about 3,69,000 hectares under oil palm cultivation, with approximately 1,80,000 hectares in the fruiting stage. The cultivation area has been steadily increasing, reaching around 375,000 hectares by 2024, with an additional 80,000 to 1,00,000 hectares expected to be added in the near term.
Despite the Malaysian state agency saying it has to limit seed supplies to India to meet local demand in the face of the Malaysian government’s subsidies for palm oil replantation in some areas, the group’s chief sustainable officer Nazlan Muhammad said they are keen to collaborate with more Indian companies for palm oil seed supply.
“Our seeds grown in India are giving better yields. The plants grown in North East are in good condition,” said Muhammad.
The Indian government aims to expand oil palm cultivation to 1 million hectares by 2025-26 and further to 6.6 million hectares by 2030, targeting production of 2.8 million tonnes of palm oil. Andhra Pradesh, Telangana, and Kerala account for 98 per cent of India's palm oil production.
The National Mission on Edible Oils, Oil Palm (NMEO-OP), launched in 2021-22, is the central government’s flagship scheme to boost oil palm cultivation, focusing on Northeast India and the Andaman & Nicobar Islands.
In 2023, the Patanjali Group had come under fire by the Assam Jatiya Parishad (AJP) Group to halt its palm oil cultivation efforts in Assam for the significant risk that these posed to the region’s biodiversity.
In July 2022, the Assam government had signed an agreement with Patanjali Foods Limited to cultivate palm oil despite environmental experts and political opponents warning of severe adverse effect on the natural environment, tribes, and species of the Northeast.
AJP had said palm oil cultivation is known to deplete soil quality through excessive groundwater absorption. It is also known to contribute to global warming, it warned, which explains why numerous countries have imposed bans on palm oil cultivation. The Supreme Court of India had also intervened by prohibiting palm oil cultivation in the Andaman & Nicobar islands to protect their biodiversity.
“The Union government’s policy to cultivate palm oil on 2 lakh hectares of Assam’s land by 2025-26 has already raised concerns about its environmental repercussions. The state government’s allocation of vast tracts of land in Tinsukia, Baksa, Udalguri and Sonitpur districts to Patanjali Group for palm oil cultivation further escalates these concerns. The cultivation initiative has been officially initiated near the Dhala-Shadia bridge in Tinsukia district,” AJP president Lurinjyoti Gogoi had said, adding that the renowned Dibru-Saikhowa Sanctuary’s existence could be compromised.
Talking about the escalating heat wave and reduced rainfall in Assa, over the past decade, Gogoi had said the expansion of palm cultivation could aggravate these environmental challenges, posing an alarming threat to Assam’s nature and biodiversity.
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