Teresa Kok’s Palm Oil Challenges
by Tan Xue Ying (The Edge) With numerous challenges dominating Malaysia’s palm oil industry, all eyes are on Teresa Kok as she officially begins as the minister of primary industries.
Other markets that the Malaysian palm oil industry could look at is the downstream sector and greater adoption of biodiesel.
“The volatility of the market, and tariff and non-tariff barriers emphasise that just producing palm oil as a commodity is no longer enough. Adding value through innovative downstream activities is imperative,” said industry veteran M R Chandran.
Also, Malaysia currently has a biodiesel mandate for B7, a petroleum diesel blend comprising 7% palm methyl ester. The mandate has stayed unchanged since December 2015, although the former federal government had intended to roll out B10 as early as June 2016.
On the other hand, Indonesia has planned to make it mandatory for biodiesel to have a bio-content of at least 25% from 2019, as the country pushes to boost local consumption of palm oil.
“If we can push for the biodiesel agenda, it is possible to actually divert at least 650,000 tonnes of Malaysian CPO into the market, therefore reducing our stockpile,” said Teoh Beng Chuan, chief executive officer of Palm Oil Refiners Association of Malaysia (Poram).
Most expect Kok to carry on with her predecessor’s high-level lobbying against the EU’s anti-palm oil campaign, as she has acknowledged the need to do so herself.
However, the ministry’s decision on the Malaysian Sustainable Palm Oil (MSPO) standard, set to be mandatory by next year, currently lacks clarity.
“It cannot be denied that this will be a daunting task and there will be challenges in achieving this goal,” said Chandran, adding that smallholders should be given more support and technical assistance to meet sustainability objectives.
“The complexity of the palm oil supply chain and the large number of players including policymakers and governments necessitate collaborations for maximum leverage and impact. Once the baseline parameters of MSPO are achieved, companies will be better equipped to move forward to a more stringent international standard such as the Roundtable on Sustainable Palm Oil,” he said. READ MORE