KUALA LUMPUR: US President Donald Trump’s signing of the executive action to withdraw from the TPP yesterday is a big blow to Malaysian commodities, especially palm oil.
Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong said Trump's decision will impact the Malaysian government's target of generating up to RM20 billion from the sale of crude palm oil to the 12-member TPP collective by 2021.
He said that at present, the country generates RM13 billion from the sale of palm oil to the 12 countries in the TPP group, even without the finalisation of the TPP.
The RM20 billion projection was based on the assumption that American tariffs against palm oil would have been removed once the US became a signatory to the Trans-Pacific pact.
Despite the setback, Mah said that he expects the export of palm oil to grow 5-8 per cent this year, and that the average price will hit RM2,700 per metric tonne in 2017.
The figures are based on Malaysia's aggressive push for palm oil in countries like India, as well as the planned FTA with Iran, which will open up the Malaysian commodity to a large new market.
Mah was speaking today at the '19th Malaysia Strategic Outlook Conference 2017' organised by Asian Strategy & Leadership Institute (ASLI).