Malaysia must diversify palm oil markets amid US tariffs

Malaysia needs to diversify its palm oil supply markets to reduce its reliance on any one export destination in light of tariff challenges posed by the United States, Malaysian Palm Oil Board (MPOB) chairman Datuk Mohamad Helmy Othman Basha has said. He noted that the 24% tariff imposed by the United States on Malaysian palm oil exports poses a major challenge to the industry, potentially impacting the country’s export volumes.

“While the tariffs may result in lower palm oil exports to the United States, the negative impact will be more pronounced in the importing country due to the limited availability of alternatives. Palm oil used in the US industry cannot be easily substituted by other oils, suggesting that the increased costs may ultimately impact US consumers,” he said at a meeting of the advisory committee of the 2025 development plan.

He noted that the government, through the Ministry of Plantations and Commodities, is actively engaging with its ASEAN counterparts to develop a coordinated regional response.

As part of the 2025 council meeting, MPOB has intensified its research program to include new areas of “Technology” and “Social Economy”, reflecting the council’s commitment to addressing the broader economic and social challenges of the oil palm industry. Previously, MPOB’s research activities focused on five main areas: yield, climate change adaptation, processing, and food security. Now, one of the key issues for council members to consider in their deliberations is increasing yields. Although palm oil production has increased in recent years, palm yields have remained stagnant.

“By December 2024, about 9.3% or 520,000 hectares of oil palm in Malaysia will be over 25 years old,” Datuk said, adding that it was time to adopt advanced biotechnology, breeding and cloning tools to improve yields.

He also stressed that the health impact of saturated mineral and aromatic mineral oils in food products is still a matter of debate, and to date, Malaysia has seen three cases of palm oil shipments being rejected from two European countries.

“With most of the palm oil used in food production, there is an urgent need to address the dominance of mineral oil hydrocarbons in the value chains, especially in downstream industries,” he said.

Tags: Malaysia, palm oil