Malaysia, the world’s second-biggest palm oil producer, is weighing a range of trade curbs to strike back against what it calls unfair policies from the European Union (EU) that block market access for the tropical oil.
The South-east Asian country will coordinate its response with Indonesia, the largest edible oils supplier globally. Strategies being considered include slowing commodities trade with Europe and reviewing imports from the bloc, according to Malaysia’s Deputy Prime Minister Fadillah Yusof.
The EU agreed to a historic law in December 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 leading international criticism of the policy.
“If they’re too firm on their decision, if they do not want to listen to us, I think one of the areas that we can be looking at together with Indonesia is how we should look at Europe,” Fadillah, who is also Malaysia’s Minister of Plantation and Commodities, said in an interview on Tuesday (Feb 7). “If we are not fairly treated, I think there should be some counteraction by us.”
The two countries — which together make up more than 80 per cent of the world’s palm oil supply — say the rule is discriminatory. It will cut off market access for millions of small farmers across the region, Latin America and Africa who do not have the means to meet the stricter traceability requirements. Palm oil is used to make everything from chocolate to lipstick, soaps and detergents.
Indonesian talks
“The action by the EU is trying to phase out smallholders from the system,” Fadillah said from his office in Putrajaya. The bloc keeps introducing new requirements despite compliance from bigger plantations on international sustainability standards, as well as the Malaysian government’s commitment to a greener economy and limiting new plantation areas, he said.
Source: Bloomberg
Share:
<p>Time: 2024 By: Ministry of Industry and Trade</p>
