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Malaysia, the Netherlands Enhance Sustainability in Oil Palm Industry

Early this month, the Prime Minister of the Netherlands Mark Rutte paid a courtesy call on the Minister of Plantation and Commodities Datuk Seri Fadillah Yusof at the Malaysian Palm Oil Board (MPOB) during his working visit here.

This visit is hoped to strengthen the established good relations between Malaysia and the Netherlands.

At MPOB, Rutte planted Clonal Palm Series 3 (CPS3), advanced oil palm planting material that helps boost palm oil productivity to meet the nation's aspiration in sustainable agriculture by maximizing yield per unit land area.

CPS3 records impressive oil-to-bunch at 37.5 per cent and oil yield of 11.32 tonnes per hectare per year. The clone, intended for high oil yield produces higher crude palm oil yield estimated at 8.5 tonnes per hectare per year compared to the national average of 3.25 tonnes per hectare per year in 2022.

CPS3 is MPOB's latest addition to the Clonal Palm Series (CPS) and was introduced to the industry in 2020.

CPS3 was awarded Gold at the International, Invention, Innovation and Technology Exhibition (ITEX) 2020, and received a Malaysia Innovative Product Award (MIPA) in 2020.

Rutte also visited the MPOB Gallery, which showcases the history, cultivation, processing, and various uses of palm oil and its significance in Malaysia's economy and global importance.

I had shared with the Prime Minister of the Netherlands the history of the oil palm in the Southeast Asia which began in 1848 when the Dutch shipped four dura oil palm seedlings from Africa to Southeast Asia.

They were meant as botanical samples for planting at the Buitenzong (now known as Bogor) Botanical Gardens, Indonesia.

Over time, the Dutch refined cultivation techniques and improved processing methods, making palm oil a significant commodity in the region's economy.

Their efforts laid the foundation for the expansion of the oil palm industry in Southeast Asia, transforming it into a key global producer of palm oil.

Not many are aware of the significant relationship between Malaysia and the Netherlands in promoting sustainability in the country's oil palm industry.

MPOB inked memorandum of understanding (MoU) with two organizations of the Netherlands namely IDH The Sustainable Trade Initiative and Solidaridad Network Asia Ltd in February 2020.

The MoU signed between MPOB and IDH The Sustainable Trade Initiative is entitled "Sustainable Climate Smart Palm Oil Production by Smallholders in Malaysia" while that between MPOB and Solidaridad Network is named "National Initiative for Sustainable and Climate Smart Oil Palm Smallholders (NI-SCOPS)".

The objectives of the memorandum included among others, to accelerate the aspiration of Malaysia on the production of palm oil in a sustainable manner, particularly under the NI-SCOPS programme by assisting smallholders in Malaysia; and to increase the adoption of sustainable certification scheme of the smallholders through enhancing sustainable practices. NI-SCOPS has four key performance goals which are to increase productivity, improve smallholders' resilience and to adapt to climate change, support forests preservations, and contribute to Malaysian Sustainable Palm Oil (MSPO) Certification Scheme revision.

The scopes of work under these MoU will contribute to the sustainable development of the Malaysian oil palm industry, particularly in ensuring the inclusiveness of the oil palm smallholders including mainstreaming of the MSPO certification scheme at landscape approach.

These MoUs intensify a closer strategic partnership and cooperation between Malaysia and the Netherlands in the sustainable initiatives, particularly for the oil palm industry and mitigation of climate change.

Rutte, during his two-day working visit, had said that the Netherlands would maintain its involvement in the NI-SCOPS programme in Malaysia for the next five years.

The Netherlands, which has been supporting Malaysia in issues related to palm oil over the years and has also assured that the Ad Hoc Joint Task Force between the EU, Indonesia and Malaysia will discuss the implementation of the European Union's Deforestation Regulations (EUDR) so that it would have a minimum impact on smallholders.

The EUDR is a major concern to Malaysia as it will prevent our smallholders from accessing the EU market.

The EU should recognize our Malaysian Sustainable Palm Oil (MSPO) Certification Scheme, which is mandatory for our entire palm oil production sector.

We also hope that the EU will agree to recognize the MPSO as an EUDR audit process at the meeting.

In terms of trade, Malaysia exported palm oil and palm-based products worth RM5.12 billion to the Netherlands for the period of January until October 2023.

In 2022, the Netherlands was Malaysia's 14th largest trading partner globally and the second largest among the European Union's (EU) member states, with total trade amounting to RM48.04 billion (US$10.93 billion); an increase of 33.4 per cent, compared to RM36.01 billion (US$8.68 billion) in 2021.

The Netherlands was also the largest palm oil importer among the EU countries, with the volume amounted to 732,325 tonnes in 2022.

Last year, the total value of palm oil and palm-based products exported to the Netherlands was RM10.54 billion, an increase of 22.7 per cent from RM8.59 billion in 2021.

In terms of quantity, palm oil and palm-based products exported in 2022 slipped 7.8 per cent to 1.62 million tonnes from 1.76 million tonnes in 2021.

The Netherlands is the EU's largest importer of palm oil and also Malaysia's most important palm oil export destination in the EU. A large part of the imported palm oil is processed in the Netherlands.

Our palm oil is also exported to other EU member states.

We anticipate the Netherlands will continue to increase its imports of palm oil from Malaysia and support our endeavors in promoting sustainable palm oil production, and in fighting negative allegations against palm oil.

* The writer is director-general of Malaysian Palm Oil Board,  Datuk Dr Ahmad Parveez Ghulam Kadir


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