PUTRAJAYA: The Malaysian palm oil industry is gaining stronger support from India and China with the signing of two memoranda of understanding today.
Prime Minister Tun Dr Mahathir Mohamad witnessed the signing of these MoUs between Bohai Commodity Exchange (BOCE) Malaysia/Asean with Hakan Agro DMCC from India as well as Boce Global from China.
Primary Industries Minister Teresa Kok said these partnerships will see Malaysian signatory, BOCE Malaysia/Asean dealing with two major supply chain managers in the United Arab Emirates and China.
“Hakan Agro DMCC, from Dubai is a major player in the commodities supply chain and has extensive business exposure in the Indian subcontinent, the Middle East and the UAE.
“Already well entrenched in the commodities trade, Hakan Agro DMCC is confident that they would facilitate the export of more than one million tonnes of Malaysian palm oil into the Indian sub-continents in 2020.
“Their enthusiasm has been further fortified by the knowledge that the ministry and Malaysian Palm Oil Council are embarking on an aggressive diversification of Malaysian palm oil into new markets,” she said after the MoU signing ceremony.
Also present was BOCE Malaysia/Asean chairman Datuk Seri Khairudin Abu Hassan.
China’s BOCE, Kok added, that signed the second MoU also saw an uptrend in demand for Malaysian palm oil and other commodities into China.
“BOCE aims to import about 1.5 million tonnes into China by 2020. They aim at primarily the inner regions of China which are less exposed to palm oil.
“This offers significant growth potential for palm oil consumption due to the large populations in the inner regions of China and which are also registering significant economic growth.
“I am pleased that such well established and experienced international supply chain managers are stepping in to help Malaysia diversify its palm oil markets.”
As Malaysia was being pressured by the European Union’s potential displacement of palm biofuel and the recent spate with Indian oils and fats trade associations, Kok described the latest developments as “timely”.
“On top of India and China, I am confident that Malaysia will find new and alternate markets for palm oil with growth targeted at Asean, Africa and the Middle East.
“Buoyed by the recent healthy spike in palm oil prices, the industry is ready to prove many detractors wrong.”
Much was also talked about when an Indian trade association recently told its members not to buy palm oil from Malaysia, Kok added.
“This also came back-to-back at a time when Malaysia had already increased its palm oil exports to India to record levels over 4 million tonnes due to the advantageous tax structure under the MICECA.
“Our market performance in India this year, up to December 2019, is thus projected to increase by at least 80 per cent minimum compared to the 2018 India import statistics.”
Back in 2010, India signed Malaysia–India Comprehensive Economic Cooperation Agreement (MICECA), of which the effective duty on products shipped from Malaysia into India would not be more than a mutually agreed threshold limit.
Under the MICECA, import duty on crude palm oil and refined palm oil shipped from Malaysia is cut by four per cent and nine per cent, to 40 per cent and 45 per cent effective January 1, this year.