Mah warns of retaliatory action against EU palm oil ban


Malaysia warns of retaliatory action against the European Union’s (EU) threat to ban imports of palm oil into the region.

Plantation Industries and Commodities (MPIC) Minister Datuk Seri Mah Siew Keong said Malaysia, together with other palm oil producing countries such as Indonesia and Thailand, are prepared and will do whatever it takes should the EU remain adamant to exclude palm oil from its biofuel mix and renewable energy (RE).

“Please note that we are doing whatever is necessary, and we are prepared to go all the way and possibly even match it with retaliatory actions from all palm oil producing nations.

“I hope it won’t come to that stage, but if it does and our products are discriminated, we can also do the same things, taking action against their products because we — Malaysia, Indonesia and Thailand — are also purchasers for a lot of European products,” Mah said in a press conference yesterday.

“Negotiations and discussions are ongoing to ensure it doesn’t come to that.”

According to Mah, the EU Council is expected to vote in favour or against palm oil within the next two weeks.

The Malaysian Reserve previously reported the heightened tension with the EU over the proposed ban, prompting Malaysia to consider new export destinations for the commodity.

As the EU is the second-largest export destination after India, the ban is expected to have an adverse effect on Malaysia’s key commodity.

According to a recent official data, the EU represents 12% of the total 13.8 million palm oil shipped globally as of November 2017.

Africa, with a population expected to hit two billion by 2040, has therefore been hailed as the new frontier of industrial palm oil production.

The continent’s dwindling plantation industry and its increasing demand for palm oil has resulted in a great increase in the import of the commodity in recent years.

The Malaysian Palm Oil Council (MPOC) recently opened an office in West Africa as part of its effort to increase the export of palm oil in the continent.

The office, Mah explained, will become the African continent’s activity centre for Malaysian palm oil.

The export of palm oil and palm oil products is expected to reach up to RM80 billion this year due to higher production.

“We should be able to export around RM80 billion of palm oil and palm oil products in 2018 as production is going up.

“The total exports for 2016 was at RM67.5 billion, while the projection for 2017 total exports is at RM75 billion,” Mah said.

He said 20 million tonnes of crude palm oil is expected to be produced this year, an increase from the 19.5 million tonnes projection last year.

For the period of January to November 2017, total exports of palm oil and palm products was at 22.4 million tonnes valued at RM71.5 billion.

It translates into a 1.3% increase on the volume of exports and 16.2% increase in terms of its value.


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