Malaysia to go on ‘attack’ to counter palm oil critics – minister

Malaysia plans to adopt an “attacking and aggressive” approach to marketing its palm oil, the country’s commodities minister said Thursday, as the world’s most consumed edible oil comes under increased scrutiny and criticism in the West.

Zuraida Kamaruddin, who oversees Malaysia’s plantation industries and commodities, told reporters a more assertive communications plan is needed to play up the positives of palm oil and push back against pressure groups in the U.S. and Europe, while targeting new markets.

“All the benefits are proven by various scientists, but not publicized enough,” she said in Malaysia’s administrative capital of Putrajaya, without citing specific studies. “Some politicians in the [European Union] are still uninformed and choose not to be informed. We have to look at unconventional ways to promote palm oil.”

Palm oil is a key ingredient in a wide range of products, from food to cosmetics, but has long been controversial. Environmentalists say it drives deforestation, with huge swathes of rainforest cleared in past decades to make way for plantations. Europe has taken a particularly hard line, moving to phase out palm oil from biofuels and proposing a ban on imports of products linked to forest loss.

Use of palm oil in food and cosmetics has been declining in Europe, partly due to pressure on corporations from green groups. Supermarkets and wellness stores have begun labeling palm oil-based products, which producers say is discriminatory.

Indonesia and Malaysia, the world’s top two producers, argue palm oil is unfairly maligned in terms of both environmental concerns and health.

The website of the Malaysian Palm Oil Council calls it a “highly regulated industry,” and states that “various approaches and technologies aimed to reduce the impact of the industry on the environment have been converted to successful practices.” The website also says palm oil is “rich in natural chemical compounds important for health and nutrition.”

Zuraida said the new strategy would be formulated before Malaysia makes its case in March before a World Trade Organization panel, which is looking into oil labeling and discrimination. The probe follows complaints from both Malaysia and Indonesia to the WTO.

Last year, Malaysia’s producers turned out 18.1 million tons of crude palm oil. Indonesia and Malaysia together account for about 87% of global palm oil exports. Malaysia’s top destinations include India, China and, despite the pressure, the EU.

But the European Commission in November proposed legislation aimed at preventing imports of commodities linked to deforestation. This would hit not only palm oil, but other products such as livestock, lumber, cocoa and coffee. Under the new law, companies and importers would have to prove that their global supply chains are not contributing to the destruction of forests, and that commodities they use are produced in accordance with the laws of the source country.

In the U.S., meanwhile, a Fostering Overseas Rule of Law and Environmentally Sound Trade Act (FOREST) proposed to Congress aims to restrict the import of commodities originating from illegally forested or deforested land.

Proponents of the industry have argued that campaigns against palm oil are an attempt to bolster markets for edible oils produced in the West. Malaysia’s former Prime Minister Mahathir Mohamad told Nikkei Asia in 2019 that the criticism was “not so much because palm oil is dangerous to health, but more because of the competition in the edible oil business.”

To alleviate concerns, the country created a Malaysian Sustainable Palm Oil (MSPO) certification system, emulating the Roundtable on Sustainable Palm Oil (RSPO) certification widely recognized and accepted in Western countries. Over 94% of oil palm stakeholders are certified with MSPO to date. But “so far the scheme has failed to garner widespread international market acceptance since its launch in 2015,” Argus Media said in a report earlier this month.

Rather than relying on existing markets, Zuraida said Malaysia should also be “attacking” untapped economies in the Middle East and Central Asia, for example, to sell them palm oil.

“The best form of defense is to attack, so I tell the industry, ‘Let’s attack, rather than spending a lot of time defending,'” she said. “I’m going to Dubai and Jiddah soon, and we would be signing a few agreements with buyers.”

Nikkei Asia 

Tags: Indonesia, EU, India, Malaysia, WTO, palm oil, China