M’sia asserts more pressure on proposed palm oil ban

by RAHIMI YUNUS / pic by MUHD AMIN NAHARUL

MALAYSIA’S palm oil producers, united in their quest to campaign against the European Union’s (EU) proposed ban on the commodity, are making their stand via a petition that was handed to the ambassador and head of EU delegation to Malaysia Maria Castillo Fernandez yesterday.

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) — representing 3.2 million smallholders and families in the country, have demanded the EU to end the ban.

“Why just palm oil that are regarded as high risk? What about other oils? This is a form of discrimination,” Felcra chairman Datuk Nageeb Abdul Wahab told reporters after about an hour-long discussion with Fernandez yesterday after the submission of the memorandum.

Nageeb said the ambassador accepted the memorandum and understood the plea of the smallholders.

However, in the tell-all meeting, Nageeb said they (the EU in Malaysia) could not explain the “reasons” why only palm oil is being banned.

The meeting was also attended by Nash president Datuk Aliasak Ambia, Felcra CEO Mohd Nazrul Izam Mansor and Swedish Ambassador to Malaysia Dag Juhlin-Dannfelt.

As it is, the four organisations of palm oil producers said the Delegated Act drafting and feedback process were flawed from the beginning.

“It is mind boggling that less competitive and less efficient oilseeds such as rapeseeds, sunflower oil, canola and soybean are classified as ‘’low risk’,” the petition read.

“The EU must withdraw the proposed on palm oil biofuels in the Renewable Energy Directive (RED),” it added.

It also stated that the EU must end discrimination against Malaysian products in which all discriminatory provisions against palm oil in the RED must be removed.

The petition, which was read by Felda chairman Tan Sri Datuk Megat Zaharuddin Megat Mohd Nor before the EU ambassador, also asked the EU to repel the Delegated Act to strengthen the strong economic and trading relationship between Europe and Malaysia.

The petition also called for the EU to not impose future ban on palm oil and must commit to a fair and non-discriminatory approach to the commodity.

The European Commission has recently published a Delegated Act that classified palm oil as “high risk”.

A decision over the proposed Act is expected to be concluded by next month.

The joint Malaysian palm oil producers highlighted that palm oil produces higher yield than other oilseeds per hectare, about four to 10 times more productive than other oilseeds.

Europe currently consumes 7.5 million tonnes of palm oil a year, or about 10% to 15% of the global palm oil demand.

In biofuels, the continent uses about three to four million tonnes of palm oil every year.

Nageeb said the four palm oil producers’ organisations will urge the government to bring the matter to the World Trade Organisation if the EU passed the proposed ban on palm oil.

Separately, Megat Zaharuddin said Felda would require a minimum of RM1.5 billion this year and in the long term to sustain its operation and ensure settlers’ and its own plantations are as productive as possible.

He said Felda has provided inputs to the government in the preparation of the Felda’s White Paper, set to be tabled in the Parliament in April.

Megat Zaharuddin said it would be helpful if Felda receive a capital injection from the government, particularly during the low crude palm oil prices season now, but the decision is up to Putrajaya to decide.

Felda is currently facing a very critical cashflow, forcing the state agency to restructure its RM8 billion debt, while looking to dispose of non-strategic assets worth RM2.2 billion.