Country expects to increase palm oil trade with China

KUALA LUMPUR: The export prospects for Malaysian palm oil in the second half look positive, as the Primary Industries Ministry has set its eyes on wooing more buyers from China, the world’s second largest economy and Malaysia’s top three palm oil consumer, says its minister Teresa Kok Suh Sim.

Her mission, when she joins Prime Minister Tun Dr Mahathir Mohamad on his official visit to China later this month, would be to persuade China to increase its offtake of Malaysian palm oil for the manufacture of food products and to attract investors to the Malaysian shores to establish palm oil-related businesses.

Last year, China bought 1.92 million tonnes of palm oil from Malaysia, behind India, which imported 2.03 million tonnes and the European Union, 1.99 million tonnes.

Cumulatively, these three countries accounted for almost 36 per cent of Malaysia’s total palm oil exports last year (16.56 million tonnes valued at RM50 billion).

As the world’s second largest producer after Indonesia, Malaysia’s palm oil exports amounted to 23.97 million tonnes worth RM74.74 billion last year, versus 23.29 tonnes, valued at RM64.59 billion in 2016, according to the Malaysian Palm Oil Board.

Kok is bent on inviting Chinese investors to partake actively in manufacturing palm oil-based products in Malaysia and export the products back to China.

“Prior to our bilateral visit, I went to China on a private visit and met some representatives from government-linked companies and government agencies there,” she said, adding that there was overwhelming response from investors, expressing interest to do business in Malaysia.

She, however, feared there might be insufficient supply of edible oil from the industry, especially from the smallholders sector.