Malaysia might halt palm oil export to EU in retaliation for new deforestation regulations
12/01/2023 (The Edge Markets), Kuala Lumpur - Malaysia may consider halting the export of palm oil to the European Union in retaliation for the trade bloc's new deforestation regulations, said Deputy Prime Minister and Minister of Plantation and Commodities Datuk Seri Fadillah Yusof.
He said this is one of the options Malaysians would consider to deal with the EU's negative palm oil campaign that has been turned up a notch in recent years.
“If we need to engage experts from overseas to counter any decision made by the EU, we have to do it. The other option will be to stop exporting to Europe, and focus on other countries, if they keep making it difficult for us. We believe industry players in Europe will still import our palm oil,” he said at the Palm Oil Economic Review and Outlook Seminar 2023 on Thursday (Jan 12).
He added that Malaysia will involve Indonesia in the discussion — the world’s biggest producer and exporter of palm oil — in his upcoming work visit to the country at the end of January.
Fadillah further added that the EU’s new deforestation regulations also negate progress made by Malaysian palm oil players to comply with sustainable palm oil production rules.
“Palm oil is considered the cheapest available oil, and the EU's constantly changing goalpost appears like it's a trade barrier to protect their products. This is where the World Trade Organization will have to come in to make sure such unfair trade restrictions could be removed.
“Most importantly, we have to make them (the EU) understand that we are complying with international standards, such as Malaysian Sustainable Palm Oil (MSPO) and Roundtable on Sustainable Palm Oil (RSPO) certifications,” he added.
Europe is the third largest importer of Malaysian palm oil, accounting 9% of total exports.
According to the proposed deforestation regulations, six commodities — palm oil, cattle, wood, soy, cocoa and coffee, and their derivative products — which were grown or raised on land that was subjected to deforestation or forest degradation will be banned from entering the EU market after the regulations are passed in the European Parliament.
Recently, Prime Minister Datuk Seri Anwar Ibrahim and Indonesia President Joko Widodo agreed to work together to fight against the EU’s "discrimination" against palm oil.
Widodo, popularly known as Jokowi, made the comment after meeting Anwar, who was making his first overseas trip to Indonesia since being elected in November.
He said the two countries would "fight discrimination against palm oil", and "strengthen cooperation through the Council of Palm Oil Producing Countries" to address concerns at a joint press conference at the presidential palace in Bogor, Indonesia.
Indonesia and Malaysia are the world’s two largest palm oil producers, accounting for more than 80% of global supply.