KUALA LUMPUR: The export prospects for Malaysian palm oil in the second half of 2018 looks positive, as the Ministry of Primary Industries has set its eyes on wooing more buyers from China, the world’s second largest economy and Malaysia’s top three palm oil consumer, says minister Teresa Kok Suh Sim.
Her mission, when she joins Prime Minister Tun Dr Mahathir Mohamad on his official visit to China later this month, would be to persuade China to increase its offtake of Malaysian palm oil for the manufacture of food products and to lure them to the Malaysian shores to establish palm oil related businesses.
Last year, China bought 1.92 million tonnes of palm oil from Malaysia, behind India which imported 2.03 million tonnes and the European Union at 1.99 million tonnes.
Cumulatively, these three countries accounted for almost 36 per cent of Malaysia’s total palm oil exports in 2017 of 16.56 million tonnes valued at RM50 billion.
As the world’s second largest producer after Indonesia, Malaysia’s palm oil exports amounted to 23.97 million tonnes last year, worth RM74.74 billion, versus 23.29 tonnes in 2016 valued at RM64.59 billion, according to the Malaysian Palm Oil Board.
Kok is bent on inviting Chinese investors to partake actively in manufacturing palm oil-based products in Malaysia itself and then export the products back to China.
“Prior to our bilateral visit, I actually went to China, on a private visit, and met some representatives from government-linked companies and government agencies there,” she said, adding that there was overwhelming response from investors, expressing interest to come to Malaysia and do business here.
She, however, feared that there may be insufficient supply of the edible oil from the industry especially from the smallholders sector.
“Sometimes our problem is the quantity we supply which is not adequate to meet the demand from big companies. But, if we are able to tackle this (insufficient supply), palm oil prices in the second half of 2018 can recover significantly,” said Kok.
The physical price for crude palm oil, as of August 3, stood at RM2,190 per tonne.
As of end-June 2018, the palm oil inventory has increased 43 per cent to 2.19 million tonnes from the same period a year ago with exports stagnant at 1.13 million tonnes.
She further explained that it was not only important to get Chinese investors to come here, but consistently follow up with them on making Malaysia their investment destination.
“This is what we are focusing on right now. My ministry is working on some Memoranda of Understandings and we hope to even seal some agreements during the forthcoming visit.
“If we can convince them, during the upcoming trade mission, the prospects for the second half not only looks good but we can improve our palm oil exports to China,” she said, adding that besides the republic, other markets on the ministry’s radar included the African continent, the Philippines, Iran and India.
Asked on the smear campaigns by the European Union (EU) against Malaysian palm-based biodiesel, Kok said she would address the issue during her visit to the EU in October.
The Seputeh Member of Parliament said under her leadership, the ministry would also go all out to tap the social media platform to spread “the love” for palm oil.
“I remember clearly, this campaign is not new… the late Plantation Industries and Commodities Minister Tun Dr Lim Keng Yaik also faced similar challenges and he always “hantam” or “wacked” the EU for spreading “half-baked truths” about Malaysia’s palm oil and timber industry,” she quipped.
The anti-palm campaign hurled against Malaysian palm oil was first mounted by American soybean farmers in 1986 as they were facing a bleak future as palm oil, the closest substitute to soybean oil, was fast dominating the American edible oil market.
Malaysian palm oil, rich in nutritional value, was also sold at a discount to soybean oil in the American market, which irked the late Keng Yaik, but the American food, confectionery and soap making industries found it cheaper and better to use Malaysian palm oil in their products for taste and quality.
Kok said soya bean producing companies in the EU spent a whopping US$600 million, last year, to launch the anti-palm oil campaign but Malaysia only spent a meagre RM2 million “to tell the truth about palm oil.”
She added that in countering the issue, Malaysians, at large, should join the relevant authorities in fighting the ban against the use of palm oil in the EU.
At the same time, the government, she said, would push for smallholders to adhere to the Malaysian Sustainable Palm Oil (MSPO) standards and make it mandatory for them to comply with the requirement by Dec 31, 2019. -BERNAMA