'New palm oil MOU with China not extension of the old one'

The April 25 memorandum of understanding signed with China on the import of an additional 1.9 million tonnes of palm oil is not an extension of a previous MOU inked on Nov 23, 2015.

The Primary Industries Ministry said the 2015 MOU signed by the then-minister of plantation industries and commodities was only in relation to cooperation on the quality and safety of palm oil exported to China.

"The cooperation was to facilitate the country's palm oil trade to China. There was no commitment or guarantee that China would increase its import of Malaysian palm oil.

"Under the Pakatan Harapan government, the ministry is tasked with negotiating additional imports of Malaysian palm oil by China and at the same time, to explore opportunities under the Belt and Road Forum for International Cooperation (BRFIC) initiative," the ministry said in a statement today.

Former prime minister Najib Abdul Razak claimed yesterday that the MOU was an extension of the original agreement signed under his administration. 

The new MOU was finalised between the Malaysian Palm Oil Council and China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-Products.

"The main objective of the MOU is to enhance good relations in agro-commodity trade, especially in the palm oil sector between the two countries.

"It will also increase the export of palm oil to China by an aggregate amount of 1.9 million tonnes worth RM4.56 billion for five years (2019-2023)," the ministry said.

It said the cooperation allowed direct purchase of palm oil and palm-based products between Chinese government-linked companies and Malaysian palm oil exporters.

"This MOU does not restrict or limit Malaysia's palm oil exports to China. It is in addition to the existing palm oil exports to China by Malaysian exporters," the ministry said.

The agreement also opens new opportunities for Malaysia to invest in jet biofuel plants estimated at RM2.06 billion and unsaturated fats at RM206 million.

- Bernama