M’sia warns of retaliatory actions on EU products

However, Mah did not list the products from Europe that could fall under the ‘limited imports’


Malaysia will retaliate by limiting imports from the European Union (EU), if the economic bloc pushes for the palm oil biofuels ban — a move which would stop the purchases of products worth millions of ringgit.

Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong (picture) said Malaysia is ready to limit the purchase of products from EU countries if the law pulls through.

“We are hoping to use diplomacy to solve this problem. However, if the draft does not favour Malaysia, we are ready to retaliate,” Mah said in the Dewan Rakyat yesterday.

He was responding to a query from Kuala Selangor MP Datuk Seri Dr Irmohizam Ibrahim who asked on the strategic measures taken by the ministry to address the contingency plan if a comprehensive solution cannot be achieved following the ban.

“At the moment, I would like to emphasise that there is no plan to cut diplomatic ties,” Mah stressed.

Mah, however, did not list the products from Europe that could fall under the “limited imports”.

The EU is the world’s second- largest palm oil importer after India, having bought 6.7 million tonnes in 2016/17, according to US Department of Agriculture data.

According to the Malaysian Palm Oil Board, Europe is the second-largest export market for Malaysia’s palm oil, overtaking China in 2017.

Europe imported 2.06 million tonnes, just behind India — which remained Malaysia’s top palm oil importer at 2.83 million tonnes.

The EU is a key partner for Malaysia. Last year, the country exported goods and services worth RM8.38 billion and imported RM7.14 billion from the economic bloc.

Mah also said Malaysia is working with Indonesia under the Malaysian Palm Oil Council (MPOC) to address the matter.

“If passed, the ban will badly affect both Malaysia and Indonesia, who are the world’s top producers of palm oil.

“A Palm Oil War Room has been set up to monitor and draft the country’s strategic measures on palm oil trade,” he added.

“In Malaysia, there are about 650,000 smallholders who depend on palm oil as an economic lifeline and the ministry estimates another three mi l l ion workers involved directly and indirectly in the industry.

“While most of the large, listed plantation companies are certified by the Roundtable on Sustainable Palm Oil, additional stringent sustainability criteria ‘will be very detrimental’ to smallholders,” he added.

The move from the EU is considered discriminatory as it would affect the demand for palm oil, which is one of Malaysia’s biggest commodity- based export contributors with a value of RM71.5 billion last year.

“Among other measures taken are to conduct bilateral talks with individual EU countries, and data and information sharing on the palm oil industry to all stakeholders.

“We have also taken continuous efforts to overcome the negative perceptions of consumers against palm oil through mass media,” Mah said further.