Malaysia, Indonesia join forces to protect palm oil producers

Indonesia and Malaysia have agreed to work together to counter negative campaigns against their vital palm oil exports and strengthen protections for their workers as the countries brace for a slowdown in production due to looming US tariffs, the South China Morning Post reports.

Southeast Asian countries whose economies rely heavily on the oil have launched a multilateral push to boost trade with existing and new partners, seeking trade deals with Washington in an attempt to soften the blow of tough tariffs set to come into effect on August 1.

Indonesia and Malaysia are the world’s two largest palm oil producers, accounting for about 85% of global supply of the ubiquitous ingredient used in everything from chocolate spreads to cosmetics and pharmaceuticals. However, at the moment, demand for “palm” is mainly limited to traditional markets such as India and China, as environmentalists, especially in the West, accuse owners of oil palm plantations of deforestation and loss of local biodiversity.

Heads of relevant ministries agreed to coordinate efforts and actions regarding the export of their products and expansion of markets of influence.

Earlier it became known that both global giants have achieved significant success in promoting their products to EU markets. Thus, duties on Malaysian products were reduced by 20-40 percentage points, and supplies from Indonesia within the quota will not be subject to duties at all. The rate of trade duty outside the quota will be 3%.

Tags: Indonesia, Malaysia, palm oil