14th November 2019
ATTRACTED TO MALAYSIAN PALM OIL, LEADING COMMODITIES SUPPLY CHAINS SEEK GREATER PARTICIPATION AND OPPORTUNITIES
Today, Prime Minister Tun Dr. Mahathir Mohamad, Foreign Minister Datuk Saifuddin Abdullah and I as Minister of Primary Industries witnessed the signing of two separate MoUs seeking greater participation in the global trade of Malaysian palm oil.
Through these MoUs, the Malaysian signatory, Bohai Commoditity Exchange Malaysia/Asean, has struck a partnership with two major supply chain managers in the United Arab Emirates and China.
Hakan Agro DMCC, from Dubai is a major player in the commodities supply chain and has extensive business exposure in the Indian sub-continent, Middle East and the UAE.
Already well entrenched in the commodities trade, Hakan Agro DMCC is confident that they would facilitate export of more than one million MT of Malaysian palm oil in their core markets in the Indian sub-continent in 2020.
Their enthusiasm has been further fortified by knowledge that Malaysia’s Ministry of Primary Industries and Malaysian Palm Oil Council (MPOC) are embarking on an aggressive diversification of Malaysian palm oil into new markets.
China’s Bohai Commodity Exchange who signed the second MoU also see an uptrend demand for Malaysian palm oil and other commodities into China. It aims to import about 1.5 million MT into China by 2020.
They aim to target primarily the inner regions of China which are less exposed to palm oil, yet offer significant growth potential due to the large populations in the inner regions and which are also registering significant economic growth.
I am pleased that such well-established and experienced international supply chain managers are stepping in to help Malaysia diversify its palm oil markets.
Pressured by the EU’s potential displacement of palm biofuels and the recent spate with Indian oils and fats trade associations, these developments are timely and most welcomed.
On top of India and China, I am confident that Malaysia will find new and alternate markets for palm oil with growth targeted in ASEAN, Africa and the Middle East. Buoyed by the recent heathy spike in palm oil prices, the industry is ready to prove many distractors wrong.
Much was also talked about when an Indian trade association recently signalled non-palm oil trade with Malaysia. This also came back to back at the time when Malaysia had already increased its palm oil exports to India to record levels in excess of 4 million MT due to an advantageous tax structure in India.
Our market performance in India this year, up to December 2019, is thus projected to increase by at least 80% minimum, compared to the 2018 Indian import statistics.
Nevertheless, I have asked my Ministry officials to look into various measures including counter trade with China, India and other major importer countries. I am confident that our differences will be settled amicably and the excellent trade, cultural and diplomatic relations with India will be an enduring one.
Lastly, I applaud this MoU with the Bohai Commodity Exchange China and Hakan Agro DMCC, which should facilitate our own efforts for greater palm oil penetration in China, India and the Indian sub-continent.
Their online trading platform could open up opportunities for greater inflow of finished, ready to use palm based products which is key to adding significant value to our overall export revenue from palm oil and products.
YB TERESA KOK
MINSTER OF PRIMARY INDUSTRIES