Malaysia hopes palm oil industry can be compliant with EU law when grace period ends

KUALA LUMPUR: Malaysia hopes its palm oil industry will be fully compliant with the European Union’s anti-deforestation policy before a newly agreed deadline, its commodities minister said on Wednesday. The European Parliament approved on Tuesday a one-year delay on implementation of its landmark deforestation law, which bans the importation of palm oil, soy and other goods linked to the destruction of forests from Dec. 30 next year.

The law which had initially been due to take effect this month and required companies and traders selling soy, beef, coffee, palm oil and other products in the EU market to provide proof their supply chains do not contribute to deforestation. Malaysia and Indonesia, the world’s largest exporters of palm oil, have previously complained that the law and implementation rules are discriminatory.

Plantations and Commodities Minister Johari Abdul Ghani said the extension would give big and medium size estates a year to comply while small farmers would be granted an additional six months on top of that.

“For the big players, almost all of them have complied but for the smallholders, some of it, is still a work in progress,” he said. “With the extension, it will help us because we want to make sure that we have the proper polygons recorded for every estate and smallholders’ land in order to create traceability,” he said on the sidelines of a Malaysia-China trade summit in Kuala Lumpur.

Asked about his views on a trade war between the United States and China, Johari said it was not a concern for Malaysia. China accounts for about 17.1% of Malaysia’s trade and the United States about 9.5%, he said.

“When there is a trade war between two countries, we also have to make sure that it will not affect us,” he added.