MALAYSIA will take advantage of the global supply shortage of vegetable oil to regain palm oil’s market share in the European Union, Minister of Plantation Industries and Commodities Zuraida Kamaruddin said today.

According to Zuraida, the conflict between Ukraine and Russia is an opportune time to gain the EU’s trust in palm oil again.

“I have instructed agencies working for the ministry – such as the Malaysian Palm Oil Council (MPOC) and the Malaysian Palm Oil Board (MPOB) – to aggressively campaigns for our commodity to fill global market gaps in the interim. 

“These agencies will have to ensure that Malaysian palm oil remains a top choice in global markets in the long run, particularly those where the consumers have been exposed to vicious propaganda in the past.

“The ministry will not want to waste a good crisis. It is time we step up efforts to counter adverse propaganda to undermine palm oil’s credibility and for us to showcase the numerous health benefits the golden oil has to offer,” she said in a statement today.

Lower quality of soybean exports from Brazil, Paraguay, Russian and Ukraine is also driving up demand for palm oil in the EU, Zuraida said.

Indonesia’s move to widen the scope of its ban on raw materials for cooking oil to include crude and refined palm oil has also pushed prices of the commodity, she added.

“Global vegetable oil prices are likely to remain high in the first half of 2022. This is why I believe now is an opportunity for palm oil to regain its confidence from European buyers given the publicity the commodity received in the past.”

Ukraine and Russia account for 80% of the global export of sunflower oil and 10% of the global vegetable oil export. 

With the closure of Ukraine’s Black Sea and Azov Sea ports, this has further impacted global supply chains.

In December 2018, the EU revised the Renewable Energy Directive (RED) to ban the use of palm oil citing extensive deforestation in Indonesia and Malaysia. 

Malaysia and Indonesia, produce about 85% of the world’s palm oil.

The uncertainty over the supply of vegetable oil from Eastern Europe saw crude palm oil prices hit an all-time-high of RM6,395 a tonne on March 31, bringing huge profits to palm oil industry players, including the 400,000 smallholders nationwide. – May 6, 2022.