Top palm oil growers send team to EU to fight deforestation law
09/02/2023 (The Edge Markets), Jakarta/Kuala Lumpur - The world’s top palm oil producing nations will send a team to the European Union (EU) to discuss the bloc’s new deforestation law and prevent “unintended consequences” for the industry and its millions of small farmers.
The Council of Palm Oil Producing Countries, an inter-governmental body representing about 90% of global output, will explain the impact of the rules to the EU, especially the potential exclusion of smallholders from supply chains.
Producers of the tropical oil have been struggling to counter allegations in Europe and other western countries that growing palm oil involves destruction of forests and animal habitats. They say much of the production in Southeast Asian nations is sustainable and traceable, and that European policies are discriminatory and amount to trade barriers.
In December, the bloc agreed to a historic law that will stop products causing forest destruction from being sold in European shops and supermarkets. Products like wood, rubber, beef, leather, cocoa, coffee, palm oil and soy won’t make it past the port unless proven to be deforestation-free.
Malaysia and Indonesia are spearheading criticism of the policy and warn it may cut off market access for millions of small farmers in Asia, Latin America and Africa who do not have the means to meet the stricter traceability rules.
Farming practices
Palm oil nations need to convey the message that they are committed to sustainability, Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto said in a press conference on Thursday, following a bilateral ministerial meeting in Jakarta to discuss coordinated action against the new law.
The delegation to the EU will include smallholders, who will explain how they implement sustainable practices on their estates, Malaysia’s Deputy Prime Minister Fadillah Yusof said at same briefing. Both countries will also push smallholders to put in place the best agricultural practices, he said.
Malaysia has been weighing potential trade curbs including slowing commodities flows with Europe and reviewing imports from the bloc. Still, halting exports or boycotting products from the EU was not discussed at this meeting, Indonesia’s Hartarto said.
“The ministers agreed that the regulation is a protectionist instrument that will raise costs for exporters of palm oil and reduce their competitiveness against other vegetable oils in the European Union,” the council said in a separate statement. They also noted their disappointment that “the EU has not conducted consultations with its trading partners in a meaningful way”.