(Adds details, background)
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.
India, the world’s biggest importer of edible oils, also buys palm oil from Indonesia, soyoil from Argentina and Brazil, and sunflower oil from Ukraine.
India was Malaysia’s third-largest export destination last year for palm oil and palm-based products.
Malaysia signed another pact with China’s Bohai Commodity Exchange for the export of 1.5 million tonnes of its palm oil by 2020. (Reporting by A. Ananthalakshmi; Editing by Clarence Fernandez)