Kuala Lumpur: 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.
According to BERNAMA News Agency, Ahmad Parveez emphasized that Malaysia aims to enhance market access across the region through these agreements, ensuring that ASEAN remains competitive in the global palm oil trade. He noted that as Malaysia leads ASEAN this year, the country is positioning the palm oil sector at the heart of regional economic growth. The ASEAN chairmanship offers an opportunity to strengthen collaboration within the region and with key global markets, particularly the United States and the European Union.
He stated that this engagement 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. The focus extends beyond trade; Malaysia is committed to promoting policies that support the sustainable production and trade of palm oil, aligning with ASEAN’s broader goals of enhancing food security and fostering a unified palm oil sector across the region.
Ahmad Parveez highlighted Malaysia’s leadership in promoting sustainability, advocating for the harmonization of sustainability standards across ASEAN. The Malaysian Sustainable Palm Oil (MSPO) certification sets a high benchmark for responsible production and could serve as a model for other ASEAN nations. This move aims to address global concerns such as deforestation, carbon emissions, and ethical labor practices, enhancing the credibility of palm oil as a responsibly produced commodity.
In addition, the Council of Palm Oil Producing Countries (CPOPC) plays a significant role in amplifying ASEAN’s collective voice. Malaysia and Indonesia, as founding members, work closely to advocate for fair policies, ensuring that palm oil-producing nations are represented on the global stage. The inclusion of smallholders in the global supply chain is a priority, with efforts to improve their participation in trade through regional collaborations.
Ahmad Parveez also underscored the importance of innovative technologies to boost productivity while safeguarding the environment. Through innovation, higher yields can be achieved without requiring additional land, balancing growth with environmental preservation. Malaysia is leading discussions within the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), focusing on empowering smallholders and addressing trade barriers.
A memorandum of understanding is expected to formalize 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 crucial to shaping the future of the palm oil trade. Initiatives like the Joint Working Group on Palm Oil aim to ensure sustainable production and address challenges related to the Sustainable Development Goals transparently.
Among ASEAN countries, Indonesia is the largest producer of palm oil, accounting for approximately 60 per cent of global production. Malaysia follows as the second-largest global producer, contributing around 25 per cent of the world’s palm oil. Thailand contributes about five per cent and is working to expand its production capacity, while the Philippines and Vietnam produce two to three per cent and about one per cent respectively, with plans to increase their production in the future.