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Khairlia Khairulzaman


The Edge Markets MY



Malaysian palm oil producers call for halt on FTA talks with EU over palm oil impasse

6 Mar 2019 (The Edge Markets MY) KUALA LUMPUR : Malaysian palm oil producers are requesting that the government "stall all negotiations on business dealings" with the European Union (EU), in light of the latter's push to curb usage of the commodity in biofuels.

This is amid concerns over the EU's 'articulate' implementation of new restrictions on palm oil despite ongoing efforts by producers to adhere to guidelines on sustainable production, said Felcra Bhd chairman Datuk Mohd Nageeb Abdul Wahab.

"We have been very diplomatic [and] tactful when dealing with this matter, but enough is enough," Nageeb told a press conference in Wisma Felcra today.

"The only way to approach this matter now is through political and economic means," he said, adding that Indonesia, the world's second largest palm oil producer, has also agreed to use a similar approach moving forward.

Among suggestions raised was for Malaysia to halt its ongoing negotiations on the EU free trade agreement, Nageeb said.

Concurrently, four organisations representing oil palm smallholders are also in the midst of drafting a memorandum to be passed to the EU commission about the plight of Malaysia's 650,000 oil palm smallholders, he added.

The four are: Felcra Bhd, Federal Land Development Authority (Felda), Rubber Industry Smallholders Development Authority (Risda) and Malaysian National Association of Smallholders (PKPKM).

The European parliament is coming out with a new European Commission Delegated Regulation Act to classify palm oil as a cause of deforestation.

If this legislation is passed, palm oil could be banned from being used in biofuel in the region. The EU is a purchaser of about 7.5 million tonnes of palm oil per year, of which 40% or 3 million tonnes are used in biofuel.

In Malaysia, some 5.8 million hectares of land are used for oil palm plantation, of which 1.4 million hectares are Malaysian Sustainable Palm Oil (MSPO)-certified