Latest news with #MalaysianSustainablePalmOil
Daily Express
5 days ago
- Business
- Daily Express
Malaysia prioritising smaller plantations in green push
Published on: Wednesday, May 28, 2025 Published on: Wed, May 28, 2025 Text Size: Malaysian Palm Oil Council chairman Datuk Carl Bek-Nielsen previously likened the classification to 'getting slapped with a fine for speeding while you have been driving below the speed limit', calling it a blow to an industry that has significantly reduced its environmental footprint. - Pic for illustration only. Kota Kinabalu: Amid ongoing scrutiny over the European Union's decision to label Malaysia a 'standard risk' under its deforestation rules, the government is focusing on sustainability and support for smallholders in the shift towards greener practices. Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said Malaysia is actively working to ensure that its sustainability certification systems, such as the Malaysian Sustainable Palm Oil (MSPO) standard, are accessible to and inclusive of small-scale farmers. 'What we want to do now is ensure the MSPO standards can also embrace smallholders. As of today, about 85% of our smallholders are able to comply. 'They do not have mills or refineries, but they produce the fruits. We help integrate them into the supply chain and justify their compliance,' he told reporters after launching the Malaysia International Cocoa Fair 2025 (MICF 2025) here yesterday. His remarks follow strong reactions from industry leaders, who have described the EU Deforestation Regulation (EUDR) classification as 'unjust' and damaging to the livelihoods of Malaysian producers, especially smallholders. Malaysian Palm Oil Council chairman Datuk Carl Bek-Nielsen previously likened the classification to 'getting slapped with a fine for speeding while you have been driving below the speed limit', calling it a blow to an industry that has significantly reduced its environmental footprint. Advertisement In acknowledging that Malaysia must still comply with EUDR, Johari said it needs to be done even if enforcement is not yet in effect. However, he stressed that many of Malaysia's major exporters already operate within a fully traceable and sustainable supply chain. 'A large portion of our products are exported to Europe because many of our players are large companies. These companies own the entire supply chain, from plantations, mills, and refineries to oleochemical plants, so they have full control and are able to meet export requirements,' he added. In addition to palm oil, he said, cocoa farmers are also being brought into the fold. 'I have instructed the Malaysian Cocoa Board to ensure all smallholders are registered. Every cocoa plantation must be certified. If they hold land grants from the state government, great; if not, they need to apply,' he said. Johari made it clear that the government is committed to halting deforestation, stating that any expansion in agriculture must take place on existing land. 'We must use existing land and increase yields through good agricultural practices and high-quality planting materials. That is the only way we can double our yield per hectare,' he said. Despite Malaysia's ongoing efforts, the EU's decision to classify the country as 'standard risk' has prompted questions about fairness and transparency, as the classification could result in greater scrutiny and higher compliance costs for exporters. Still, Johari remains optimistic, adding, 'Actually, our certification is already recognised. Currently, we are classified under 'standard risk', but we are working on improving this. We aim for recognition of our sustainability and traceability systems.' Earlier in his speech, he said representatives from the EU are expected to visit Malaysia in September or October to observe local practices and assess the country's regulatory readiness. 'I have also encouraged all commodity players in Malaysia, whether in palm oil, rubber or cocoa, to adopt sustainability practices if they wish to export,' he said. The push to improve sustainability systems, particularly for smallholders, is seen as essential not only for meeting international standards but also for protecting livelihoods and ensuring the long-term growth of Malaysia's commodity sectors. Also present were Deputy Plantation and Commodities Minister Datuk Chan Foong Hin and Malaysian Cocoa Board chairman Datuk Matbali Musah. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
New Straits Times
5 days ago
- Business
- New Straits Times
EU's 'standard risk' label on Malaysian palm oil clouds upcoming FTA talks
KUALA LUMPUR: The European Union's (EU) 'standard risk' label on Malaysian palm oil has thrown a wrench into next month's free trade agreement (FTA) talks, economists said. The classification, they said, sends a provocative signal at a time when both sides are hoping to reboot stalled discussions after more than a decade. Williams Business Consultancy Sdn Bhd director Dr Geoffrey Williams said it also reflects the EU's intent to use non-tariff barriers as its main negotiating tool, echoing past failed strategies. "This is a disappointing start to the FTA talks and signals that the EU intends to leverage non-tariff trade barriers based on their own unverified and disputed sustainability criteria as their main negotiation tool. "It is exactly the same bullying tactic used by the United States (US), but through non-tariff barriers rather than tariffs," he told Business Times. Over A Decade Of Pause Malaysia and the EU are set to resume FTA negotiations next month, nearly 13 years after talks stalled over disagreements on procurement access and sustainability requirements. Universiti Utara Malaysia Associate Professor Dr Irwan Shah Zainal Abidin said the 'standard risk' classification could negatively impact the tone of the upcoming talks, especially since palm oil remains one of Malaysia's key export commodities to the EU. "This classification, rather than a 'low risk' label, will certainly have negative implications for the renewed FTA discussions, particularly for Malaysia," he said, adding that palm oil will be a central point of contention. Formal negotiations between Malaysia and the EU were first initiated in 2010 but were suspended in 2012 after little progress was made on key issues. Williams said the current posture from the EU suggests little has changed since the talks first began. The negotiations, he said, were hindered by two key demands from the EU namely access to federal government procurement and entry into Malaysia's automotive sector. To advance these goals, Williams said the EU employed non-tariff sustainability restrictions on palm oil and imposed stringent technological standards on electrical and electronic products as bargaining tools. "They failed to reach an agreement then and it looks like they intend to pick up where they left off. So the EU-Malaysia FTA risks becoming a repeat of history, ending in either overly extended negotiations or complete failure again," he added. Irwan said the EU's risk assessment may be based on outdated data or misconceptions, rather than the current realities on the ground. He argued that the 'standard risk' label is deeply flawed and should be contested, suggesting it likely stems from inadequate engagement or entrenched bias against palm oil. "The reality is that deforestation linked to palm oil is no longer the case in Malaysia," he added. Irwan also pointed to the implementation of the Malaysian Sustainable Palm Oil (MSPO) certification, which has been mandatory since 2020, as a key policy shift that the EU appears to have overlooked. "There is a need for the EU to consider country-specific contexts. Not all palm oil production leads to deforestation, certainly not in Malaysia," he added. In contrast to the EU's rigid and outdated frameworks, Williams said Malaysia has demonstrated greater agility in forging trade deals. He pointed to Malaysia's swift conclusion of an FTA with the United Kingdom and a tariff arrangement with the US within weeks. This, he added, highlighted the stark difference in negotiating pace compared to the EU, whose "efforts remain bogged down". Sharp Criticism The EU's recent move to assign Malaysia a 'standard risk' designation under its EU deforestation regulation (EUDR) has also drawn sharp criticism from the Malaysian Palm Oil Council. It argued that the label unfairly undermines Malaysia's national sustainability standards, particularly the MSPO scheme. Williams echoed this concern, calling the designation a unilateral and protectionist tool. "It is simply a way of making life difficult for Malaysian palm oil producers by saying the MSPO standards are too weak and pose a sustainability risk. "It is a unilateral negative product label rather than an actual ban," he said. Under the EUDR, countries and commodities are classified into three categories namely low risk, standard risk and high risk. The classifications determine the level of scrutiny and due diligence required for goods such as palm oil, soy and timber entering the EU market. A 'low risk' status means simplified checks, while 'high risk' implies stringent controls. 'Standard risk', which Malaysia has been assigned, subjects exporters to the full due diligence requirements under the regulation. "A 'low risk' designation would reassure EU buyers that Malaysian palm oil was generally safe from compliance breaches that could halt production or sales," Williams said. "But with the 'standard risk' tag, it damages brand perception, consumer confidence and puts pressure on Malaysia to engage EU consultants to fix so-called operational gaps." Efficient Sector, One Of The Best According to Irwan, Malaysia's palm oil sector is among the most efficient globally and contributes positively to climate goals. This efficiency is reflected in palm oil's significantly higher yields compared to other oil crops such as sunflower and soy, along with its role as a carbon sequester. Labelling Malaysia as 'standard risk' without accounting for these advantages, he argued, overlooks the broader environmental context. Given this, he stressed that any credible risk classification must be based on a holistic evaluation of a country's overall climate impact. "Any country that has achieved zero conversion of natural forest should not be classified as 'standard risk'. "There is still time for Malaysia to engage with the EU and highlight the real progress being made, especially by smallholders working to reduce forest loss and degradation," he added. Malaysia exported about 1.07 million tonnes of palm oil to the EU in 2023, representing about 7.1 per cent of its total palm oil exports. The export value of crude palm oil alone amounted to roughly US$446 million, with a volume of 392,811 tonnes, making the EU one of Malaysia's key markets. Despite this, trade volumes have shown signs of strain. Between July 2022 and March 2023, Malaysia's palm oil exports to the EU fell by around 30 per cent, totalling 426,000 tonnes over the period. The decline has been attributed in part to regulatory uncertainty and shifting EU sustainability requirements.
New Straits Times
6 days ago
- Business
- New Straits Times
Malaysia to show EU officials its sustainable palm oil practices: Johari Ghani
KOTA KINABALU: Plantation and Commodities Ministry will explain Malaysia's sustainable palm oil practices to representatives from the European Union (EU). Its minister Datuk Seri Johari Abdul Ghani said the ministry was expecting the EU delegation to visit Malaysia between September and October. "They have already recognised our Malaysian Sustainable Palm Oil (MSPO) certification. We want them to fully accept our sustainability and traceability systems. "I'm waiting for them to come here in September or October, so they can see firsthand how we implement these practices," he told reporters after launching Malaysian International Cocoa Fair at the Sabah International Convention Centre here today. Johari was responding to the European Union Deforestation Regulation's (EUDR)recent move to classify Malaysia as a "standard risk" country. Malaysian Palm Oil Association chief executive officer Roslin Azmy Hassan previously said the classification could result in palm oil producers, especially smallholders, being excluded from the EU market, despite complying with national standards like MSPO. MSPO is Malaysia's national sustainability certification that ensures environmentally friendly, socially responsible and economically viable palm oil production. Johari encouraged commodity players in the country to adopt sustainability practices, especially if they intended to export their agricultural products. "For the EUDR, we must comply. Even without it, many of our products are exported to Europe. Large companies with plantations, mills, refineries and oleochemical plants control the entire supply chain. "However, we want to ensure that MSPO certification also includes smallholders. As of now, about 85 per cent of smallholders are compliant," he added. Meanwhile, Johari said the country is gearing the cocoa sector towards climate-smart agriculture. He believes that there was tremendous potential for the Malaysian cocoa industry thus the need to embark on a low carbon cocoa feasibility study. "As a country, we have announced to the world that we commit to being net zero carbon emission by 2050. We also commit to reducing methane emission by 30 per cent by 2030 (and) to protect our forest cover. It must not fall below 50 per cent. "Where are we today as a country? We are at 54 per cent. That's the reason why I have implemented a policy to make sure that there's no more deforestation in this country. We have to maximise the land that we have," he said this in his keynote speech at the launch. He said by embarking on sustainable planting, there would be much higher yield and premium prices for the farmers to benefit from in the future. Malaysia, he said, continues to rank among the top five cocoa grinders in the world. The country grinds around 370,000 tonnes of cocoa beans annually. Exports have also shown an upward trend, with export volume of cocoa and cocoa products increased by 29 per cent from 530,000 tonnes in 2023 to roughly 690,000 tonnes in 2024 with a valuation of RM15 billion in the past year. "This is a testament to Malaysia's commitment to value-added production and innovation. "Recognising the ongoing global cocoa bean shortage as well as the many income raising opportunities for cocoa farmers, the government through the Malaysian Cocoa Board is committed to revitalising our cocoa plantations. "These efforts are already underway as we call upon planters, investors, and cooperatives to be part of this national drive." Johari added that the efforts in the upstream sector continue to bear fruit with cocoa bean production increasing by 65 per cent from 269 tonnes in 2023 to 445 tonnes in 2024. "To be able to maximise value for our cocoa farmers, Malaysia is focusing on premium cocoa varieties, such as fine flavour beans, single-origin beans, and organic beans, to meet niche global demands for quality and health driven consumption. "This will enable us to position our brand at the high-end of the value chain," he said.
The Star
6 days ago
- Business
- The Star
M'sia boosts green push
KOTA KINABALU: Amid ongoing scrutiny over the European Union's decision to label Malaysia a 'standard risk' under its deforestation rules, the government is focusing on sustainability and support for smallholders in the shift towards greener practices. Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said Malaysia is actively working to ensure that its sustainability certification systems, such as the Malaysian Sustainable Palm Oil (MSPO) standard, are accessible to and inclusive of small-scale farmers. 'What we want to do now is ensure the MSPO standards can also embrace smallholders. As of today, about 85% of our smallholders are able to comply. 'They do not have mills or refineries, but they produce the fruits. We help integrate them into the supply chain and justify their compliance,' he told reporters after launching the Malaysia International Cocoa Fair 2025 (MICF 2025) here yesterday. His remarks follow strong reactions from industry leaders, who have described the EU Deforestation Regulation (EUDR) classification as 'unjust' and damaging to the livelihoods of Malaysian producers, especially smallholders. Malaysian Palm Oil Council chairman Datuk Carl Bek-Nielsen previously likened the classification to 'getting slapped with a fine for speeding while you have been driving below the speed limit', calling it a blow to an industry that has significantly reduced its environmental footprint. In acknowledging that Malaysia must still comply with EUDR, Johari said it needs to be done even if enforcement is not yet in effect. However, he stressed that many of Malaysia's major exporters already operate within a fully traceable and sustainable supply chain. 'A large portion of our products are exported to Europe because many of our players are large companies. These companies own the entire supply chain, from plantations, mills, and refineries to oleochemical plants, so they have full control and are able to meet export requirements,' he added. In addition to palm oil, he said, cocoa farmers are also being brought into the fold. 'I have instructed the Malaysian Cocoa Board to ensure all smallholders are registered. Every cocoa plantation must be certified. If they hold land grants from the state government, great; if not, they need to apply,' he said. Johari made it clear that the government is committed to halting deforestation, stating that any expansion in agriculture must take place on existing land. 'We must use existing land and increase yields through good agricultural practices and high-quality planting materials. That is the only way we can double our yield per hectare,' he said. Despite Malaysia's ongoing efforts, the EU's decision to classify the country as 'standard risk' has prompted questions about fairness and transparency, as the classification could result in greater scrutiny and higher compliance costs for exporters. Still, Johari remains optimistic, adding, 'Actually, our certification is already recognised. Currently, we are classified under 'standard risk', but we are working on improving this. We aim for recognition of our sustainability and traceability systems.' Earlier in his speech, he said representatives from the EU are expected to visit Malaysia in September or October to observe local practices and assess the country's regulatory readiness. 'I have also encouraged all commodity players in Malaysia, whether in palm oil, rubber or cocoa, to adopt sustainability practices if they wish to export,' he said. The push to improve sustainability systems, particularly for smallholders, is seen as essential not only for meeting international standards but also for protecting livelihoods and ensuring the long-term growth of Malaysia's commodity sectors. Also present were Deputy Plantation and Commodities Minister Datuk Chan Foong Hin and Malaysian Cocoa Board chairman Datuk Matbali Musah.
The Star
26-05-2025
- Business
- The Star
Malaysia supports smallholders amid EU scrutiny, says Johari
KOTA KINABALU: Malaysia is working to make sustainability certification systems like the Malaysian Sustainable Palm Oil (MSPO) standard accessible to small farmers, says Datuk Seri Johari Abdul Ghani. "We want MSPO standards to include smallholders. As of Monday (May 26), about 85% of our smallholders can comply," said the Plantation and Commodities Minister. 'Smallholders lack mills or refineries but produce the fruits. The government helps them integrate into the supply chain, said Johari. "What we want to do now is ensure the MSPO standards can also embrace smallholders. As of Monday (May 26), about 85% of our smallholders are able to comply. "They do not have mills or refineries, but they produce the fruits. We help integrate them into the supply chain and justify their compliance," he added after launching the Malaysia International Cocoa Fair 2025 (MICF 2025) in Kota Kinabalu. His remarks follow strong reactions from industry leaders, who have described the EU Deforestation Regulation (EUDR) classification as "unjust" and damaging to the livelihoods of Malaysian producers, especially smallholders. Malaysian Palm Oil Council chairman Datuk Carl Bek-Nielsen previously likened the classification to "getting slapped with a fine for speeding while you have been driving below the speed limit," calling it a blow to an industry that has significantly reduced its environmental footprint. Johari acknowledged that Malaysia must comply with the EUDR, even if enforcement is not yet in effect. He added that many of Malaysia's major exporters already operate within a fully traceable and sustainable supply chain. "A large portion of our cocoa products are exported to Europe because many of our players are large companies. These companies own the entire supply chain, from plantations, mills, and refineries to oleochemical plants, so they have full control and are able to meet export requirements," he said. In addition to palm oil, cocoa farmers are also being integrated. "I have instructed the Malaysian Cocoa Board to ensure all smallholders are registered. Every cocoa plantation must be certified. If they hold land grants from the state government, great, if not, they need to apply," he said. Johari made it clear that the government is committed to halting deforestation, stating that any expansion in agriculture must take place on existing land. "We must use existing land and increase yields through good agricultural practices and high-quality planting materials. That is the only way we can double our yield per hectare," he said. Despite Malaysia's efforts, the EU's decision to classify the country as "standard risk" has prompted questions about fairness and transparency, as the classification could result in greater scrutiny and higher compliance costs for exporters. Still, Johari remains optimistic, adding: "Actually, our certification is already recognised. Currently, we are classified under 'standard risk', but we are working on improving this. We aim for recognition of our sustainability and traceability systems." Earlier in his speech, Johari said representatives from the EU are expected to visit Malaysia in September or October to observe local practices and assess the country's regulatory readiness. "I have also encouraged all commodity players in Malaysia, whether in palm oil, rubber, or cocoa, to adopt sustainability practices if they wish to export," he said. The push to improve sustainability systems, particularly for smallholders, is seen as essential not only for meeting international standards but also for protecting livelihoods and ensuring the long-term growth of Malaysia's commodity sectors. Also present were Deputy Plantation and Commodities Minister Datuk Chan Foong Hin and Malaysian Cocoa Board chairman Datuk Matbali Musah.
