Malaysia not to remain silent over Western anti-palm oil campaign: minister

Malaysia will not remain silent over the continuous bullying by Western countries over its palm oil industry, a Malaysian minister said on Wednesday.

Plantation Industries and Commodities Minister Zuraida Kamaruddin said the long running campaign against the vegetable oil would affect the competitiveness of Malaysian palm oil exports in the long term, something which would harm the country's economy as it is a major revenue contributor.

"The current practice of 'no palm oil 'or 'palm oil-free labeling' in France and Belgium can be traced back to 2008, when the French retail chain Carrefour started to substitute palm oil in potato chips with sunflower oil," she said in a statement.

"Singling out palm oil with the 'palm oil-free marketing and labeling' campaigns convinced consumers that palm oil is terrible whether for nutritional or environmental reasons or both ... Malaysia is left with no choice but to retaliate against 'the bullies'," she added.

Zuraida also pointed to the European Union which has classified palm oil as a crop with a high-risk rate toward indirect land-use change, hence deemed to contribute to deforestation and loss of biodiversity.

"Such a classification exercise will affect palm oil being a potential biofuel source since its usage will be gradually reduced beginning in 2023 before being 'eliminated totally' as an EU biofuel source in 2030," she said.

Zuraida said this has led to Malaysia initiating legal action against the EU and two of its members, France and Lithuania, last January under the World Trade Organization's (WTO) dispute settlement mechanism.

She also said Malaysia will act as a third party in a separate WTO case lodged by Indonesia, which is the world's biggest palm oil producer, as a sign of solidarity and support, adding that the ministry will continue to closely monitor developments in the EU, which can potentially tarnish the reputation of palm oil and adversely affecting the viability of the industry in Malaysia.

Malaysia is the world's second-largest producer of palm oil after Indonesia and according to the Plantation Industries and Commodities Ministry, it is the single-largest commodity earner, contributing about 3.5 percent to 3.7 percent to Malaysia's gross domestic product (GDP) in the third quarter of 2020.

The Malaysian Palm Oil Board (MPOB) said that the export revenue of palm oil and other palm-based products is expected to improve by 1.4 percent to 110 billion ringgit (US$24.97 billion) this year from 108.52 billion ringgit in 2021, with the higher revenue expected to derive mainly from higher palm oil exports of 17 million tons this year amid the global shortage of vegetable oils.

According to the Malaysian Palm Oil Council (MPOC), nearly 1 million people work in the sector, making it the country's second biggest employer and it is seen as the backbone of the country's social and economic development.