Palm oil giants to take on EU 

Malaysia and Indonesia’s trade ministers have said they will “discuss and coordinate” palm oil export issues, including organising a joint mission to the EU. 

The Asean pair, which together produce 90 per cent of the world’s palm oil, plan to raise the prospect of European Union barriers on imports of palm oil with the World Trade Organisation.

A resolution by the European Parliament (pictured) in April said that by 2020 the use of vegetable oils in biodiesel that were produced in an unsustainable way leading to deforestation should be phased out.

The resolution covers palm oil: a key export for Indonesia and Malaysia.

The statement said the EU resolution, as well as the unfair labelling practices by the private sector in the bloc, would hit the income of millions of smallholders.

France said earlier this month it would move to restrict the use of palm oil in producing biofuels, which Malaysia described as discriminatory, adding that it would review its trade with France.

France’s position was hurting bilateral relations, Malaysian Palm Oil Board chairman Ahmad Hamzah said.

“French attacks are uncalled for and misguided. France should be cherishing 60 years of diplomatic relations with Malaysia,” the trade boss said.

France’s Environment Minister Nicolas Hulot recently said he would block the use of palm oil in biofuels to stop “imported deforestation”, blaming unsustainable production of soybean and palm oil for impeding development in Latin America and Asean.

The Avril Group, Europe’s largest biodiesel producer, uses French rapeseed as its main input for biodiesel.

Avril CEO Jean-Philippe Puig reportedly said his company supported all initiatives to ban the use of palm oil in biodiesel.

“Why is France vehemently attacking palm oil and undermining the opportunity for many families here to earn a decent living?” Ahmad told the media.

“Palm oil is a strategic commodity and the oil palm is a miracle crop,” he said. Palm oil exports provided Malaysian farmers a path out of poverty, Ahmad said.

The Indonesian palm oil association said it feared other EU members would follow France’s lead.

The Council of Palm Oil Producing Countries, a joint initiative by Malaysia and Indonesia to coordinate when managing stockpiles and supporting prices, would lead the response, the joint statement by the trade ministers said.

“Malaysia and Indonesia will consider taking this issue to the WTO if the resolution becomes an EU directive and discriminatory in nature,” Malaysia’s International Trade and Industry Ministry announced.

The palm oil industry has been accused of causing large-scale deforestation and a smoke crisis every year outbreaks due to open burning being used as a cheap way to clear land.

European Parliament. Picture credit: Wikimedia