Primary Industries Minister Teresa Kok said the move would pave the way for the local oil palm industry to dispel unfounded negative perceptions from certain quarters in the European Union (EU). Bernama Photo

KUALA LUMPUR: Primary Industries Ministry will propose to the cabinet this month to cap the country’s oil palm plantations areas at about 6.5 million hectares by 2023.

Its minister Teresa Kok said the move would pave the way for the local oil palm industry to dispel unfounded negative perceptions from certain quarters in the European Union (EU).

“We are hopeful that palm oil will not be phased out in EU due to the ongoing anti-palm oil campaigns and lobbyists.

“We should rather improve the palm oil yields and enhance the research and development for the oil palm seeds instead of expanding the plantations areas,” she said at the 30th Annual Palm and Lauric Oils Conference and Exhibition Price Outlook 2019/2020 here today.

Kok urged the local oil palm players to open up more plantations mapping areas for the public and non-governmental organisations for greater transparency.

“We hope the cabinet will approve these proposals within this month,” she added.

Kok said Malaysia would for now not retaliate or ban EU products over the anti-palm oil campaigns.

“My ministry has sent a team to Brussels. I hope the European Commission can consider Malaysia’s position,” she said.

The ministry, she said, would continue promoting downstream players to plant more trees to restore forest, while engaging with wildlife sanctuary to conserve endangered species.

Malaysia produced over 19.5 million tonnes of crude palm oil from a planted area of 5.8 million in 2018.

The country’s total export of palm oil and palm based products was 25.2 million tonnes, generating export earnings of RM67.5 billion.

Meanwhile, the government started its expansion of the B7 biodiesel programme for the transport sector to B10 (blend of 10 per cent palm biodiesel and 90 per cent of petroleum diesel) from February 1.

B7 biodiesel will also be introduced for the industrial sector on July 1.

The ministry said the two programmes were expected use up to 761,000 tonnes of palm oil annually, subsequently reducing high stock levels.

The initiative will likely increase palm oil price to RM2,200 per tonne.

Palm oil is the largest agricultural contributor to Malaysia’s gross domestic product (GDP) with a total of RM44.8 billion or 3.8 per cent of the GDP contribution in 2017.

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