Govt freezes palm oil dealer licences to cut out middlemen
10/11/2025 (New Straits Times), Kuala Lumpur - The government has halted the issuance of oil palm fruit dealer (DF) licences to private companies in a bid to reduce the role of middlemen in the palm oil supply chain, says Deputy Plantations and Commodities Minister Datuk Chan Foong Hin.
Speaking in the Dewan Rakyat, he said the move aims to encourage Sustainable Oil Palm Growers Cooperatives (KPSM) to group smallholders under their cooperatives and apply for DF licences instead.
A DF licence permits dealers to purchase fresh fruit bunches (FFB) from smallholders or estates and sell them to palm oil mills, covering all activities related to buying, transporting, and selling FFB.
"Licences will no longer be issued to private firms. This is one of the measures designed to cut out intermediaries," he said, adding that all DF licence holders were now required to comply with Malaysian Sustainable Palm Oil (MSPO) standards.
Chan (PH-Kota Kinabalu) also said that the government had set a target of 80 per cent MSPO certification for both plantations and smallholders by 2026, covering all licensed oil palm cultivation areas.
Stressing the importance of smallholder participation, he said that they formed a significant portion of Malaysia's palm oil production chain.
"Without their involvement, full traceability in the supply chain cannot be achieved, which could affect the country's ability to meet global market and regulatory requirements," he said.
He added that RM45 million had been allocated in 2026 to implement the MSPO certification programme through the Malaysian Palm Oil Board (MPOB).
The funding will cover operational costs for MSPO 2.0 implementation via advisory and mentoring officers, as well as incentives for independent smallholders to meet certification-related costs such as audit fees, training, documentation, and other necessary expenses.
"This is a key measure to assist smallholders in meeting MSPO certification requirements. Many independent smallholders face financial constraints in fulfilling the more comprehensive MSPO 2.0 standards," he said.
"Through this initiative, the government aims not only to ensure inclusive compliance with MSPO 2.0 but also to enhance the competitiveness of Malaysia's palm oil industry in global markets, which increasingly prioritise traceability and sustainability."