Stop all Malaysia-EU talks amid looming palm oil ban

The 4 major producers — Felda, Felcra, Risda and Nash — request the govt to freeze all biz dealings with the EU


Malaysian palm oil producers have urged the federal government to initiate offensive actions against the European Union (EU), as its member countries continue to push to ban palm oil mix in biofuels.

The four major producers — the Federal Land Development Authority (Felda), Felcra Bhd, Rubber Industry Smallholders Development Authority (Risda) and National Association of Small Holders (Nash) — which represent some 650,000 smallholders in the country, are requesting the government to freeze all business dealings with the EU amid concerns over new restrictions on palm oil usage in the West.

The government should stall all discussions including the Malaysia-EU free trade agreement (FTA) and business dealings, until the issue is resolved, Felcra chairman Datuk Nageeb Abdul Wahab told a media conference yesterday.

Felda DG Datuk Dr Othman Omar, Risda chairman Rosely Kusip, Nash president Datuk Aliasak Ambia and Felcra CEO Mohd Nazrul Izam Mansor also attended the press conference.

“It has been a long time we have tried to convince the Europeans that oil palm plantation is technically sustainable and cause no deforestation.

“Nobody is listening. We (Malaysia) need to be on the defensive. We have been very diplomatic, tactful on this matter, but I think enough is enough,” he said.

He added that the world is currently producing about 15 million tonnes of certified sustainable palm oil, but the uptake is between six million and seven million tonnes.

“They say they want sustainable palm oil, but they are not buying. It is time to go via political and economical means against the EU,” he added.

Malaysia and Indonesia are the world’s two biggest palm oil producers, accounting for 85% of global supply.

According to Nageeb, the four organisations are in the middle of drafting a protest memorandum to the European Commission (EC) to express disagreements over the EU’s discrimination on palm oil besides highlighting the plight of smallholders due to the action.

The four organisations will also propose to the federal government to forward the discrimination issue to the World Trade Organisation if the EU approves a proposed act to ban palm oil in biofuels effective by 2020.

Nageeb said the ban in biofuel might just be a start for a similar ban in other areas as well.

Nageeb added that if the ban is implemented, Malaysia may lose some three million tonnes off the market, valued at RM6 billion, if the crude palm oil price hovers at an average price of RM2,000 per tonne.

The European Parliament is coming out with a new EC Delegated Regulation Act to classify palm oil as a cause of deforestation.

If the legislation is passed, palm oil could be banned from being used in biofuel in the region. The EU is a purchaser of about 7.5 million tonnes of palm oil per year, of which 40%, or three million tonnes are used in biofuel.