Palm oil to remain Malaysia's major export despite challenges: PM

Source: Xinhua| 2019-11-19 12:50:51|Editor: Wang Yamei
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KUALA LUMPUR, Nov. 19 (Xinhua) -- The palm oil industry will continue to remain a major export for Malaysia despite a variety of challenges facing the industry, Prime Minister Mahathir Mohamad said on Tuesday.

Delivering the keynote speech at the International Palm Oil Congress and Exhibition organized by the Malaysian Palm Oil Board, Mahathir said the industry was not only a major source of income but also played a key role in uplifting those in rural areas.

"Palm oil has evolved as one of Malaysia's most important commodities contributing significantly to the country's economic and social agenda. Today, the advancement of the palm oil industry is testament to the nation's achievement in terms of its contribution to the Gross Domestic Product (GDP), employment opportunities, poverty eradication and narrowing the income divide between urban and rural communities," he said.

"In 2018, palm oil and palm-based products contributed 67.5 billion ringgit (16.2 billion U.S. dollars) to the country's export earnings and provided employment opportunities to more than 3 million people along its supply chain including more than half a million smallholders," said the prime minister.

Mahathir stressed that the government is committed to the sustainability of the industry and was rolling out a variety of measures to address criticism over environmental degradation and other issues which he said were politically motivated and raised by Western-backed anti-palm oil groups.

"The Delegated Regulation which has been found to be lacking in transparency, scientific credibility and accurate assumptions to reflect the actual sustainable practices in the industry has misled the European Parliament to phase out the use of palm-based biofuel in the transportation sector by 2030. Furthermore, it is biased against palm oil biofuels compared with other crop-based biofuels," he said.

In February, the European Commission passed a delegated act classifying CPO (crude palm oil) as not a sustainable product, leading to exemption of the commodity from the list of raw materials for the eco-friendly transport fuel. The act will be brought to the European Parliament which will decide whether to enforce it or not by 2030.

Some European environmental activists have often accused palm oil plantations of threatening the habitat of several endangered species by deforestation.

Palm oil and palm-based products are currently Malaysia's fifth major export commodity, generating 62.7 billion ringgit (15.2 billion U.S. dollars) in earnings for the first 11 months of 2018.

According to the Malaysian Palm Oil Council, the country is the second biggest producer of the commodity after Indonesia, overall production accounting for 39 percent of the global output, and has a 44 percent market share of the product on the world market.