No limit, says Putrajaya in defence of latest palm oil deal with China

A deal recently inked in Beijing would see state-owned China Oil and Foodstuffs Corporation buying palm oil products from Malaysia over the next five years.

PETALING JAYA: The government has denied a claim that its recent deal to sell palm oil and related products to China is subject to an annual cap between 200,000 and half a million tonnes in the next four years.

The primary industries ministry said there were no such conditions in the memorandum of understanding (MoU) between the Malaysian Palm Oil Council (MPOC) and China’s Chamber of Commerce of Foodstuffs and Native Produce (CFNA) signed in Beijing last week.

“It is in addition to existing palm oil exports to China by Malaysian exporters,” it said in a statement to FMT.

Former prime minister Najib Razak earlier shared a purported copy of the MoU, which showed limits set on oil palm imports.

Najib, saying the MoU was based on an earlier agreement with China in 2015 signed by then-plantation industries and commodities minister Douglas Uggah Embas and Chinese Foreign Minister Wang Yi, said Beijing then had not set any limit on palm oil imports from Malaysia.

But the ministry said the MoU only related to the quality and safety of local palm oil being exported to China.

“There was no form of commitment or guarantee from the Chinese government in the MoU dated Nov 23, 2015 to increase the importation of Malaysian palm oil,” it said, adding that the latest MoU obliged both countries to agree to an additional supply of a minimum of 1.9 million tonnes of palm oil to China over a five-year period.

“As a result of our negotiations, the Chinese authorities agreed to increase imports of Malaysian palm oil.”

According to a copy of the latest MoU shared online, Chinese state-owned food giant China Oil and Foodstuffs Corporation will buy RBD Palmolein, a refined, bleached and deodorised form of palm oil, based on limits set on an annual basis.

The document, whose authenticity could not be confirmed, said exports would be capped at 200,000 tonnes this year, 300,000 tonnes in 2020, 400,000 tonnes in 2021 and 500,000 the following years.

It further said that CFNA would encourage Chinese companies to expand the annual palm oil purchase volume based on the market-oriented purchase.