FILE PHOTO: A truck carrying oil palm fruits passes through Felda Sahabat plantation in Lahad Datu in Malaysia's state of Sabah on Borneo island, February 20, 2013. REUTERS/Bazuki Muhammad/File Photo

Malaysia Says Europe's Move to Limit Palm Oil Use Will Affect Ties


JANUARY 10, 2019

Kuala Lumpur. Malaysia said on Tuesday that relations with Europe will be affected following a move by European countries to restrict the use of palm oil in biofuels in coming years.

Last year, European lawmakers backed measures to limit the use of palm oil in biofuels, ahead of an eventual ban in 2030. More recently, France laid out plans to curb imports of palm oil and exclude it from biodiesel feedstock, while Norway approved plans to ban biofuels containing palm oil from 2020.

The palm oil industry is often linked by environmental groups with deforestation and displacement of wildlife and indigenous communities. Malaysia, as the world's second biggest producer, has criticized the move by European countries.

Primary Industries Minister Teresa Kok said she expects more European countries to pass similar resolutions.

"This is going to affect bilateral relations between Malaysia and all these EU countries," Kok told reporters on the sidelines of a palm oil industry conference.

The issue has been discussed with the cabinet and Prime Minister Mahathir Mohamad will write to the president of France and the prime minister of Norway, she said.

Last year, top palm oil producers Indonesia and Malaysia criticized the European Union for backing a ban on the use of palm oil in biofuels, with a Malaysian minister calling the move a protectionist trade barrier and a form of "crop apartheid."

Kok also said she hopes palm oil prices will rise to 2,700 ringgit ($657) per metric ton or more this year.

Prices of the vegetable oil, used in everything from cookies and soap to lipstick, have taken a hit from high inventories.

Benchmark palm oil prices were trading at 2,186 ringgit per ton on Tuesday.