Malaysia’s ASEAN Chairmanship Strengthens Palm Oil Trade And Regional Cooperation -- MPOB

By Nurul Hanis Izmir

PUTRAJAYA, Jan 14 (Bernama) -- The palm oil trade is a cornerstone of ASEAN’s economic activity, and Malaysia is committed to leveraging regional frameworks such as the Regional Comprehensive Economic Partnership (RCEP) and ASEAN’s Free Trade Agreements (FTAs) with countries like South Korea, Australia and New Zealand.

Malaysian Palm Oil Board (MPOB) director-general Datuk Ahmad Parveez Ghulam Kadir said these agreements are expected to boost intra-ASEAN trade while ensuring a steady, sustainable supply of palm oil raw materials.

“We aim to enhance market access across the region through these agreements, ensuring that ASEAN remains competitive in the global palm oil trade,” he told Bernama.

Ahmad Parveez said as Malaysia leads ASEAN this year, the country is positioning the palm oil sector at the heart of regional economic growth. 

He said the ASEAN chairmanship offers an opportunity to strengthen collaboration not only within the region, but also with key global markets, particularly the United States and the European Union. 

This engagement, he said, is vital to addressing geopolitical challenges such as the ongoing conflicts in Ukraine and the Middle East, which have disrupted global trade flows.

“By fostering closer ties within ASEAN and with external partners, Malaysia aims to ensure that the palm oil sector continues to be a major contributor to the region's economic resilience. 

"Our focus goes beyond trade; we are committed to promoting policies that support the sustainable production and trade of palm oil," he said, adding that these efforts also align with ASEAN’s broader goals of enhancing food security and fostering a unified palm oil sector across the region.

Ahmad Parveez said Malaysia's leadership in promoting sustainability is also at the forefront and the country is advocating for the harmonisation of sustainability standards across ASEAN. 

“The Malaysian Sustainable Palm Oil (MSPO) certification, which sets a high benchmark for responsible production, could serve as a model for other ASEAN nations. This move would address key global concerns such as deforestation, carbon emissions, and ethical labour practices.

“By establishing consistent sustainability measures, we can enhance the credibility of palm oil as a responsibly produced commodity and align ASEAN’s palm oil trade with global expectations,” he emphasised.

In addition, the Council of Palm Oil Producing Countries (CPOPC) plays a significant role in amplifying ASEAN’s collective voice. As founding members, Malaysia and Indonesia work closely to advocate for fair policies, ensuring that palm oil-producing nations are represented on the global stage. 

Moreover, the inclusion of smallholders in the global supply chain is a priority for Malaysia, with efforts to improve their participation in trade through regional collaborations.

Ahmad Parveez also highlighted the importance of innovative technologies to boost productivity while safeguarding the environment. 

“Through innovation, we can achieve higher yields without requiring additional land, achieving a balance between growth and environmental preservation,” he stressed.

Additionally, Malaysia is spearheading discussions within the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), which focuses on empowering smallholders and addressing trade barriers. 

A memorandum of understanding is expected to formalise deeper collaboration in the palm oil sector, ensuring that the benefits of palm oil production are equitably shared across ASEAN nations.

ASEAN’s relationship with dialogue partners such as China, India, Japan and the European Union remains key to shaping the future of the palm oil trade. 

Through initiatives like the Joint Working Group on Palm Oil, ASEAN countries and the EU are working together to ensure that palm oil is produced sustainably and that the challenges related to the Sustainable Development Goals are addressed transparently.

“With these collaborations, ASEAN can remain a competitive and responsible supplier of palm oil in global markets while advancing its sustainability agenda,” he concluded. 

Among ASEAN countries, Indonesia is the largest producer of palm oil, accounting for approximately 60 per cent of global production, making it the dominant player in the industry.

 Malaysia follows as the second-largest global producer, contributing around 25 per cent of the world's palm oil. Thailand produces about five per cent of global palm oil and is actively working to expand its production capacity. 

The Philippines produces around two to three per cent of the global output, with plans to grow its palm oil sector, and Vietnam contributes about one per cent, but the country has expressed interest in increasing its production in the future. 

-- BERNAMA