M’sia: No plans to stop export to EU

No such proposal on palm oil was discussed in meetings between Malaysia and Indonesia through the CPOPC


MALAYSIA has no plans to suspend palm oil shipment to the European Union (EU) as a retaliatory measure against the bloc’s decision to phase out its consumption of the commodity.

“At the moment, we don’t have such plans,” Primary Industries Minister Teresa Kok (picture) told reporters at the Malaysian Timber Conference 2019 in Kuala Lumpur yesterday.

She also said no such proposal was discussed in meetings between Malaysia and Indonesia through the Council of Palm Oil Producing Countries (CPOPC).

“During the discussions with Indonesia through the CPOPC or other meetings, (Malaysia) has never heard about the plan to stop exporting oil to the EU,” she said.

Kok said this when asked to comment on a report by the Straits Times that Indonesia could cease its palm oil export to the EU, if the bloc continues with the plan to restrict the usage of palm oil in its biofuels.

The report added that halting the commodity’s shipment to Europe —when the demand for vegetable oil surges — has been one of Indonesia’s options to counter the ban.

Malaysia and Indonesia have been coordinating under the CPOPC to seek justice through the Dispute Settlement Body of the World Trade Organisation (WTO) against the EU’s renewable energy directive.

In June, the European Parliament had passed a delegated act that restricts and phases out the usage of palm oil in biofuel by 2030.

Earlier, Kok said Malaysia is on track to surpass the export earnings of the timber industry in 2018 worth RM22.3 billion this year.

She added that the country’s timber exports rose 2.3% to RM9.1 billion between January and May 2019 from the same period last year.

“Wooden furniture is one of the top revenue earners for Malaysia. As of last May, furniture products had contributed 36% to the timber exports, an increase of 12.7% from the first five months last year.

“Through innovation and technological advancement, timber-based manufacturers can provide better products and have the potential to expand the marketplace,” she said.

In 2018, the timber industry had contributed 1.6% to the national GDP or 2.2% of the country’s total export earnings, while the furniture products contributed about 35% of the total timber exports.

Kok said Malaysia has been committed to its pledge in maintaining a natural forest cover of more than 50% of the total landmass.

“Though Malaysia is a timber-producing nation, we have been keeping to our promise at the Rio Earth Summit in 1992 to maintain more than 50% of our land forest cover.

“To date, 55.3% of our land is under forest cover. As a major producer and exporter of timber products, we have made a tremendous effort to ensure that we are able to supply legally harvested products that are sourced from sustainably managed forests,” she said.

Kok added that as of June 2019, Malaysia has a total of 4.34 million ha of certified forests endorsed by the Programme for the Endorsement of Forest Certification scheme.

On the government’s initiative to plant 130,000ha of plantation forest, Malaysian Timber Industry Board (MTIB) deputy DG Mohd Kheiruddin Mohd Rani said the ministry has managed to assist estates to plant 92.3% of the target, with the remaining to be achieved by 2022.

“Under the Forest Plantation Development Programme, we have targeted to plant 130,000ha of forests with nine different species of fast-growing trees and we have planted about 120,000ha at the moment,”
he said.

In 2005, the Cabinet had mandated the Ministry of Plantation Industries and Commodities to implement the programme for the next 15 years starting from 2007, with a loan allocation of RM1.05 billion.

According to the Auditor-General’s Report 2018 Series 1, Forest Plantation Development Sdn Bhd, a wholly subsidiary of MTIB who is managing the programme, had successfully disbursed 81.8% (RM862.63 million) of the total loans to 64 companies.