Under EU attack, top palm oil producers Malaysia, Indonesia rethink trade strategy
FACING a backlash in Europe over palm oil’s environmental toll, the world’s top producers are scrambling to find new markets and even striking unusual barter deals, such as exchanging Russian Sukhoi jets for the edible oil.
The European Union is the second-largest palm oil export destination after India for both Malaysia and Indonesia, which dominate production in a global market worth at least $40 billion.
But palm has come under increasing fire in Europe over its impact on forest destruction, encouraging producers to look at new markets ranging from Africa to Myanmar.
Threatened by crumbling demand in Europe, the industry is waging a public relations battle and pushing producers to enter more price- sensitive markets, where Indonesia should have an advantage over Malaysia due to its lower production costs.
“Our principle is we will not let go of even one tonne of trade contract or potential demand palm has globally,” Indonesia’s deputy Coordinating Minister for Economic Affairs Musdhalifah Machmud told Reuters.
Machmud said palm oil sales were being brought up in “every trade negotiation” Indonesia conducts.
Palm oil is used in thousands of household products, from snack foods to soaps, as well as to make biodiesel. —