The government foresees a positive outlook for the palm oil industry in the first quarter of 2019 (1Q19), following the success of recent diplomatic missions to China, India, Europe and Africa.
Primary Industries Minister Teresa Kok said the government has signed several memorandum and agreements, including a free trade deal with India that would see import tariffs on palm oil reduced from 44% to 40% and on processed palm oil from 54% to 45%, effective Jan 1, 2019.
“As a result of these visits, the government is confident that there will be a significant impact on the prospects of the country’s palm oil industry in 1Q19,” Kok told the Dewan Rakyat yesterday.
She was responding to a question by Bandar Kuching MP Dr Kelvin Yii Lee Wuen who asked about Malaysia’s palm oil export prospect for 2019 and measures to be taken to boost the industry’s prospects including export prices.
Kok said in China, efforts to develop Malaysian palm-based products are being made.
Prime Minister Tun Dr Mahathir Mohamad’s visit to China in August saw the signing of three memoranda to promote Malaysian biofuel, enhance rubber technology and mechanisation as well as develop downstream applications for palm oil and palm-based products.
Meanwhile, missions to promote the commodity in the European Union have led to a consensus to draft a policy on indirect land use change that would ensure Malaysia’s oil palm market in the bloc will not be affected.
Kok said her ministry has also conducted a series of visits to new markets such as Egypt and Morocco.
“This mission has successfully opened up market and investment opportunities in Egypt and Morocco, which are seen as gateways to European, North African and Central African markets, who have all shown positive interests and reactions to import Malaysian palm oil.
“Through Morocco, we also hope to expand into new markets such as Tunisia and Libya,” she said.
Trade statistics from January to September 2018 showed that Malaysian palm oil exports increased by 3.6% to 18.27 million tonnes compared to 17.63 million tonnes for the same period in 2017.
Earlier this week, IOI Corp Bhd group CEO Datuk Lee Yeow Chor said Malaysia’s palm oil production is expected to fill the shortage of edible oil in China as a result of its global trade conflict with the US.
Lee said Malaysia could be exporting between two million and three million tonnes of palm oil to China yearly. He noted, however, that strong export activities to China would only be seen at the beginning of 2019 as the republic is still high on its edible oil stock.