MALAYSIA URGED TO DIVERSIFY PALM OIL MARKETS AMID US TARIFFS -- MPOB

KUALA LUMPUR, April 21 (Bernama) -- Malaysia must diversify its palm oil markets to reduce dependency on any single export destination for the commodity, in light of the tariff challenges posed by the United States (US).

Malaysian Palm Oil Board (MPOB) chairman Datuk Mohamad Helmy Othman Basha said the 24 per cent tariff imposed by the US on Malaysian palm oil exports poses a significant challenge for the industry, potentially affecting the country’s export volumes and the livelihoods of many stakeholders.​

“While the tariffs may lead to a decline in palm oil exports to the US, the negative impact would be more pronounced in the importing country due to limited alternatives to palm oil.

“Palm oil used in US industries cannot be easily replaced by other oils, suggesting that the increased costs may ultimately affect US consumers,” he said in his opening remarks at the Programme Advisory Committee (PAC) 2025 meeting today. 

Mohamad Helmy further stated that the government remains steadfast in its commitment to defending the interests of Malaysia’s palm oil industry against such trade barriers.

“We are exploring all avenues, including diplomatic engagements and leveraging international trade agreements, to mitigate the impact of these tariffs and ensure the continued growth and sustainability of our palm oil sector,” he added.

He noted that the government, through the Ministry of Plantation and Commodities, is actively engaging with ASEAN counterparts to formulate a coordinated regional response.

Additionally, he said Prime Minister Datuk Seri Anwar Ibrahim had emphasised the importance of ASEAN unity in addressing these trade barriers, highlighting the need for open supply chains and collective action.

Under the PAC 2025 Meeting, MPOB has intensified its research agenda efforts with the newly introduced technology (techno) and socio-economics (TSE) focus area, reflecting its commitment to addressing broader economic and social dimensions in the development of the oil palm industry, complementing its existing technical and scientific research.

Previously, MPOB’s research and development activities were anchored on five existing focus areas, namely yield performance; climate change mitigation and adaptation; milling, processing and mechanisation; food safety and nutrition; and value addition. 

Meanwhile, Mohamad Helmy said that one of the critical areas PAC members need to address during the deliberations is the industry’s concerns on yield improvements.

“Although the production of palm oil has increased over the years, the yield has remained stagnant.

“By December 2024, around 9.3 per cent or 520,067 hectares of Malaysia’s oil palm trees were over 25 years old,” he said, adding that it is high time to implement advanced biotechnological, breeding and cloning tools to increase yield.

He stressed that the health implications of mineral oil-saturated hydrocarbons and mineral oil aromatic hydrocarbons in food products are still debated today, and to date, Malaysia has experienced three incidents of palm oil consignments being rejected for entry into two European countries. 

“As the majority of palm oil is used in food production, there is an urgent need to combat the prevalence of mineral oil hydrocarbons in the palm oil value chains, particularly at the palm oil processing premises,” he said.

The annual four-day PAC Meeting involves PAC members comprising industry stakeholders, academic experts, and specialists from both local and international institutions. 

-- BERNAMA