KUALA LUMPUR – In a bid to pave the way for Malaysian palm oil to regain its market share, especially in the European Union (EU), the Plantation Industries and Commodities Ministry (MPIC) plans take advantage of the political tension in Europe and the shortage of global edible oil to promote the commodity.
Its minister Datuk Zuraida Kamaruddin said that Russia’s invasion of Ukraine beginning February 24 this year has significantly affected the global vegetable oil supplies as the uncertainty over Black Sea exports have resulted in higher vegetable and edible oil prices.
She said that this could further tighten the global oilseed and vegetable oil supplies, thus prolonging the upcycle in vegetable oil prices.
The Eastern European tension has led to shortages of sunflower oil and rapeseed oil with both countries accounting for 80% of global exports, she added.
With this, the ministry believes that the Black Sea tension will benefit Malaysian palm oil exports as many European countries with high dependency on sunflower oil have now shifted their demand to palm oil.
“In fact, Ukraine and Russia are entering the critical month for sunflower planting, which should start in April, hence the prolonged war could hamper the coming planting season.
“Ukraine’s and Russia’s sunflower oil exports account for 10% of global vegetable oil exports,” she said in a statement today.
“Market analysts are presently anticipating an increase in palm oil demand from the EU region in the near-term given lower quantity of soybean exports from Brazil, Paraguay, Russia and Ukraine as well as reduced sunflower from Russia, Kazakhstan and Ukraine,” she noted.
Coupled with the latest move by neighbouring Indonesia who is the world’s largest palm oil exporter to widen the scope of its export ban on raw materials for cooking oil to include crude and refined palm oil, global vegetable oil prices are likely to remain high in the first half of this year.
“This is why I believe now is a timely opportunity for palm oil to regain its confidence from European buyers given the publicity the commodity received in the past.
“In this respect, I have instructed relevant agencies under MPIC, such as the Malaysian Palm Oil Council and the Malaysian Palm Oil Board to undertake aggressive efforts and campaigns not just for our commodity to fill global market gaps in the interim,” she added.
Zuraida said that the agencies, in collaboration with the ministry, will have to ensure that Malaysian palm oil remains a top choice in global markets in the long run, particularly those where the consumers have been exposed to vicious propaganda in the past.
“Under my leadership, MPIC will not want to waste a good crisis,” she said.
“It is time we step up efforts to counter adverse propaganda to undermine palm oil’s credibility and for us to showcase the numerous health benefits the golden oil has to offer.”
Zuraida said that the initiatives are in line with the ministry’s ‘Malaysian Palm Oil Full of Goodness’ campaign.
On May 31, the government announced that the World Trade Organisation (WTO) had approved its application for the setting up of a panel to examine the steps taken by the EU in the implementation of the Delegated Regulation under the European Union Renewable Energy Directive 2018/2001.
Plantation Industries and Commodities Minister Datuk Mohd Khairuddin Aman Razali said the second application was approved by a Dispute Settlement Body meeting under WTO last Friday after the first application was rejected by the EU on April 28.
Zuraida had recently said that the decision by EU Parliament to ban palm oil-based biofuels entirely by 2021 – while other crop-based biofuels are capped at 7% and enjoy a gradual reduction to 3.8% by 2030 – is linked to EU’s belief that oil palm cultivation is responsible for deforestation.
She also noted that another trade ban that has often affected Malaysian palm oil export is by the United States Customs and Border Protection, curtailing palm oil import into the world’s largest economy based on forced labour allegations. – The Vibes, May 6, 2022
