MPOC’s signature event, the Palm Oil Trade Fair & Seminar (POTS), was held in Manila in The Philippines on Aug 17, 2022, for the third time since the global series was instituted. Eight papers were presented, while a special panel session discussed food security issues.
A concurrent trade fair and exhibition drew manufacturers and suppliers of palm oil and ancillary products from Malaysia. This served as a platform for the exhibitors to interact directly with buyers and customers in The Philippines. A Biz Match session enabled buyers and sellers of palm oil and derived products to discuss trade opportunities.
The event was opened by the Hon. Datuk Hajah Zuraida Kamaruddin, Minister of Plantation Industries & Commodities, Malaysia, who delivered the keynote address. MPOC Chairman Datuk Larry Soon @ Larry Sng Wei Shien welcomed the dignitaries and participants. Edited versions of their speeches follow.
“Malaysia and the Philippines have a record of strong trade relations. In 2021, total trade was recorded at US$7.3 billion, making The Philippines the 15th largest trading partner of Malaysia. In the first half of 2022, trade stood at US$4.7 billion, already indicating a significant improvement.
POTS Philippines provides a valuable platform for those in the oils and fats business, particularly palm oil, to explore business collaborations, opportunities and trade partnerships. The importance of The Philippines market for Malaysian Palm Oil (MPO) cannot be understated. It was the sixth-largest export destination for MPO in 2021, with the volume exceeding 580,000 tonnes and valued at almost US$600 million.
In 2021, the export of MPO and derived products was valued at US$24.7 billion. In addition, the industry provides employment to more than 1 million people. This indicates the importance of the palm oil industry in Malaysia’s economic development. The Ministry of Plantation Industries & Commodities – through its agencies, namely the Malaysian Palm Oil Board (MPOB), Malaysian Palm Oil Council (MPOC) and Malaysian Palm Oil Certification Council (MPOCC) – plays a vital role in R&D, marketing and promotion, as well as certification of sustainable palm oil.
The Philippines, which produces about 90,000 tonnes of palm oil, could learn from Malaysia in order to expand the industry. Malaysia has much to offer, especially in R&D, to countries that aspire to cultivate oil palm. I also believe that there are vast opportunities for the private sector in the two countries to redefine business approaches in forming strategic alliances, and to discover new ways to expand the market.
Apart from being the most affordable edible oil, palm oil is also used in the non-food sector, including oleochemicals and renewable energy. As such, we can say that palm oil is used in almost all the products consumed in our daily life.
However, palm oil has also become the subject of heavy criticism. To address these issues, we are working tirelessly with stakeholders within the country, as well as at international level through the Council of Palm Oil Producing Countries (CPOPC).
The most common allegations against the palm oil industry are about links to deforestation and forced labour. In this regard, we have engaged all relevant parties in discussion to resolve the issues amicably. Significant steps that have been taken are the establishment of a working committee between Malaysia and the US to address alleged forced labour issues; while a review panel has been set up under the World Trade Organisation to deliberate Malaysia’s complaint against the EU’s phase-out of palm oil.
To strengthen cooperation among palm oil producing and consuming countries, I’ve personally requested major importing countries to recognise our efforts in addressing these allegations. As a result, major consuming countries are now recognising the Malaysian Sustainable Palm Oil certification scheme. It ensures that MPO is produced through sustainable practices that conserve the environment.
Malaysia and Indonesia – via the CPOPC – have also established The Global Framework of Principles for Sustainable Palm Oil. This can be used as a common reference across different certification schemes applied primarily to palm oil production. It is also anchored in the United Nations Sustainable Development Goals. This is one tool that can be beneficial to the Philippines in developing its palm oil industry.
The industry is going through an exciting phase of high prices and strong growth in demand. If we commit to working together, we can overcome the challenges and reap huge benefits. Opportunities are waiting to be explored, especially in downstream lines with high value-added palm derivatives such as oleochemicals, pharmaceuticals, processed foods, specialty products and even consumer brands.
With that in mind, I encourage all participants to make the most of this event to explore joint investments which will enhance your business operations in the long run.”
“POTS has become a signature event in the palm oil industry calendar. The objective is to facilitate the marketing and trading of Malaysian Palm Oil (MPO) in the international market. POTS has grown to become an important platform for global oils and fats industry players to share the latest news and developments with their associates, counterparts and even competitors.
The Malaysia-Philippines POTS has been brought to Manila on the basis of it being the capital and business centre of the country. We have chosen the theme ‘Addressing Philippines Oils and Fats Diversity through Malaysian Palm Oil’, as it is reflective of the enormous opportunities afforded by the palm oil trade. These will drive the industry in both countries towards stronger trade partnerships and the cultivation of new ventures.
The rapid transformation of the global oils and fats market due to ever-changing trade policies, price volatility, weather uncertainties, more stringent sustainability agendas and increasing demand for food security, makes it imperative for the palm oil industry to constantly evaluate and improve existing strategies.
We must ensure that we keep pace with these challenges and changes by adopting new processing technologies, improving product development, promoting product differentiation and providing high service standards and traceability in the supply chain. Malaysia, as a pioneer and market leader in palm oil development, has been proactive and innovative in differentiating ourselves from our competitors.
In the first half of 2022, Philippines imported 340,000 tonnes of palm oil from Malaysia, an increase of almost 50,000 tonnes or 17% compared to the same period in 2021. This can be attributed to factors such as the competitive price, increase in population and robust economic growth. It is worth noting that this volume was achieved despite facing competition from other oils and fats, as well as competition from other palm oil producing countries.
There is a wide range of applications for palm oil. Its role in The Philippines is mainly to serve food demands. Asian cooking requires that the oil used is stable at high temperatures, does not impart flavour and, most of all, that it is healthy. In this aspect, palm olein is the preferred frying fat in Asia because of its high oxidative stability and low tendency to develop rancidity during prolonged storage of fried products.
Although palm oil is mainly used in food manufacturing in The Philippines, there are other areas where its use can be expanded. These include confectionery items such as chocolates; bakery items such as cookies and bread; nutraceutical derivatives such as Vitamin A beta carotene and Vitamin E tocotrienols, cosmetics and pharmaceuticals.
We see strong demand here for the use of oleochemicals, especially for personal care and household cleaning products. Besides being biodegradable, palm-based oleochemicals are available in many different formulations which give large manufacturers a wide selection of raw materials to incorporate into the final product.
The Philippines also has a biofuel development plan – the DOE’s Biofuels Roadmap 2018-40, which intends to increase the country’s biodiesel requirement to 5%. I am convinced that palm oil can be the alternative biofuel feedstock. Palm-based biodiesel has lower carbon emissions compared to petroleum diesel. It is superior to soft oil-based biodiesel as it is produced in a more sustainable manner, with lower greenhouse gas emissions.
Through today’s dialogues and interactions between players in The Philippines’ oils and fats market and MPO industry stakeholders, we are hopeful that agreements can be reached in addressing the supply-demand aspects of palm oil trade.
The agenda is designed to help you identify the biggest opportunities, crunch numbers and see what prospects can be explored. In this regard, I am glad to see an impressive representation from both the public and private sectors of Malaysia and The Philippines, to support the push towards greater trade and use of palm oil.”
