Priorities for Malaysian Palm Oil

Are there opportunities to expand recognition of the Malaysian Sustainable Palm Oil (MSPO) standard and similar national schemes?

Yes, certainly. The MSPO standard was launched last year. It is based on Malaysia’s Good Agricultural Practices for oil palm, as well as domestic laws and regulations, and our international obligations. The Indonesian Sustainable Palm Oil standard was developed by our counterparts in Indonesia. There is potential for recognition of these standards through the ASEAN mechanism.

On a recent visit to Europe, I discussed the MSPO with Members of Parliament and Ministers in different countries. The benefits of the MSPO are of great interest to many of our partners in Europe. It will require a concerted international effort to achieve recognition, but the palm oil industry will gain from this.

Regional cooperation appears to be moving forward with the establishment of the Council of Palm Oil Producing Countries (CPOPC). Where is this headed?

We are working closely with Indonesia on the major areas of operations. This is an important step forward for industry cooperation, since Indonesia and Malaysia are the two largest palm oil producers. We are confident that the CPOPC will be an effective organisation that will communicate the benefits of palm oil globally. For example, a coordinated approach to trade policy can help producer countries to fight discrimination against palm oil.

You have spoken in favour of the Trans-Pacific Partnership Agreement (TPPA). What are the potential opportunities for palm oil from this and other trade agreements?

The TPPA – once it enters into force – will be beneficial to both Malaysia and this region, and not just for palm oil. Other opportunities will emerge from the Malaysia-EU free trade agreement, on which negotiations are resuming. We can work toward increasing opportunities for palm oil, whether through lower tariffs, pulling back non-tariff barriers or obtaining recognition of the MSPO.

Is there still a danger of France implementing a new tax on palm oil?

Yes. One tax proposal was defeated in July, thanks to strong opposition from producer countries and others. But on a visit to France recently, it was clear to me that the danger of a new tax exists. It is important that Malaysia takes a firm stance on this matter: any tax increase, in any form, is unacceptable.

France has formed a commission to review the sustainability of palm oil. Malaysia will oppose any attempt to set arbitrary sustainability criteria. We must stand ready to respond should countries impose discriminatory taxes or criteria against palm oil, as it is our key export.

In which regions do you see improved prospects for marketing palm oil?

China and India are still incredibly large export markets. The vegetable oil market in both countries remains fiercely competitive, particularly in China where there is often substitution with other oils. I do, however, think we have the opportunity to generate stronger investment and export ties with both countries when it comes to palm oil.

Africa is the other region of interest. Its countries are becoming increasingly urbanised and vegetable oil demand is rising. There are encouraging prospects for exports, as well as investment in palm oil. We have the experience and know-how to make these opportunities work.

MPOC

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