Minimal Impact Expected From US Palm Oil Restrictions, Ministry Says

Malaysia’s palm oil industry is unlikely to face significant disruption from US market restrictions, as shipments to the country make up a small fraction of overall exports, the Plantation and Commodities Ministry (KPK).

The ministry shared that Malaysia exported 191,231 tonnes of palm oil to the US in 2024, accounting for just 1.1% of total exports.

“The reliance of US buyers on Malaysian palm oil, particularly those certified under the Malaysian Sustainable Palm Oil standard, makes substitution difficult.

“Therefore, the level of industry dependence in the US on sustainable palm-based materials is high,” the ministry said in a parliamentary reply.

Nevertheless, the government is stepping up support for smallholders to cushion against external risks.

“Assistance measures include the Oil Palm Smallholders Replanting Financing Incentive Programme and special grants to supply treatments against ganoderma stem rot disease, a persistent crop threat.

“These types of assistance can help reduce the impact on smallholders in Malaysia from changes in international trade policies,” the ministry said.

Meanwhile, analysts note that Malaysia, the world’s second-largest palm oil producer, is increasingly positioning its sustainability standards as a competitive edge, while also diversifying export markets to mitigate policy-driven shocks.

Tags: export, US, Malaysia, palm oil, restrictions, Sustainability, smallholders