Malaysia looks for new markets for palm oil as EU threatens with stricter ecological regulations
Facing criticism over biodiversity concerns, Malaysia is expanding its palm oil trade with India and other regions. The government emphasizes sustainable practices and innovative technologies to improve small farmers’ incomes while protecting wildlife, such as orangutans and tigers. With the EU’s upcoming Deforestation Regulation, Malaysia aims for a level playing field in global markets, asserting its commitment to sustainability.
Facing criticism from Western markets over dwindling populations of orangutans, Malayan tigers and elephants, Malaysia is looking for expanding its palm oil trade with India and other Asian and African countries. The Malaysian Plantations Ministry and the Malaysian Palm Oil Council (MPOC) says the income of small farmers improved due to palm oil cultivation and the government is committed to protect the biodiversity in the country.
Malaysia’s Minister for Plantation and Commodities Johari Bin Abdul Ghani said that the edible oil sector faces numerous challenges, from ever-changing market dynamics and evolving trade policies to increasing scrutiny on sustainability practices and environmental impact. “These are not just domestic challenges. They are global in nature and affect every player in the oils and fats industry. However, the Malaysian palm oil sector is committed to converting these challenges into opportunities,” he said and added that the country is embracing sustainable practices, investing in innovative technologies and strengthening partnerships to meet global standards.
With the European Union planning to implement the European Union Deforestation Regulation (EUDR) to December 30, 2025, the focus in Malaysia is on ensuring sustainable farming practices. According to the Malaysian government data, the population of Malaya tigers, which was 3,000 in 1900s, has decreased to less than 150 in 2020 due to habitat loss and poaching. There are 2,000 elephants left, according to 2008 data, and the population is increasing based on assumption. The Orangutan population is stable for the past 15 years at 11,000 to 15,000 now. They were more than 1,00,000 in 1900s.
MPOC Chairman Carl Bek-Nielsen said there is a misconception that the sustainability is only the interest of the West. “It is not. Sustainability is just as important for other countries too. The young people today want to do things in the right way,” he said and added that without economic viability, sustainability is not possible. “You have to ensure that businesses can generate profits to provide employment, to build houses for employees, biogas plants, to build which run fossil fuel free. Secondly we must ensure that the environmental compatibility is there. That means you do not put profits in front of environment,” he said adding that Malaysia is ensuring that the International Labour Organisation standards are implemented in oil palm fields so that palm oil is produced in a sustainable manner.
Oil palm globally occupies 0.5% of the total agricultural land but it produces 35% of the edible oils and fats. The oil palm accounts for 55% of the total edible oils and fats. When there are many countries like India that are net importers of edible oils. But the net exporters are just five countries. “Indonesia and Malaysia are like the ‘Mike Tysons’ of this sector,” he said adding that all Malaysia is asking for a level playing field.
87% of the palm oil production takes place in Indonesia, Malaysia and Thailand. “One third of the European Union’s budget is used to subsidise its farmers. EUDR is a futile, poorly thought out regulation. We have been telling the European legislators to rethink about this,” he said and added if implemented, Europe will face difficulties in buying not just palm oil, but cocos and coffee too.
CEO of the MPOC Belvinder Sron said the environmental pressure from sustainability has put a halt to deforestation. “If you cut jungles down, you will not be able to sell oils to some of the markets,” she said adding that hundreds of thousands of families in Malaysia have been lifted out of property by palm oil cultivation. She said Malaysia is strict in maintaining 50% of the land as forest and no more land will be used for oil palm cultivation and the focus is in increasing yield. The average yield 3.2 tonnes palm oil per hectare. The government aims to plant vanities that can get up to 5 tonnes oil from one hectare.
She said India increasing its indigenous production is not a problem for Malaysia. “We think that India and Malaysia can work together to ensure food security. India’s oil palm mission is not a threat to us. But it is a better step for the majority of the population,” Ms. Sron said.
She said the MPOC is trying to counter the campaign against Malaysian palm oil with facts. “We are serious in producing sustainable palm oil. We preserve our forests, which is 54%. 17% of the total land is palm oil cultivation. There is no more expansion taking place,” she maintained.
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