EU- Malaysia ties to stay strong despite palm oil dispute, says envoy

EU Ambassador and Head of Delegation to Malaysia Maria Castillo Fernandez.

KUALA LUMPUR: The European Union (EU) is optimistic that its relationship with Malaysia will remain strong despite the dispute over palm oil.

EU Ambassador and Head of Delegation to Malaysia Maria Castillo Fernandez said while there is currently no ban on palm oil going into the union, it is open to dialogue with Malaysia to overcome their differences.

“Our relations are more than palm oil and we shouldn’t let it hurt the relationship that had been forged for so long.

“We have to look at the middle and long-term solutions and we are always open to dialogue, listening to our partner in Malaysia,” she told Bernama in an interview to mark Europe Day.

Europe Day is celebrated annually on May 9 by its 28 member states to commemorate the Schuman Declaration signed in 1950 that gave birth to the EU.

Malaysia and the EU have been at loggerheads over the union’s proposed plan to restrict palm oil in biofuel starting 2021 and to completely phase it out by 2031.

The EU said the cultivation of the crop had led to deforestation and climate change. However, Malaysia refuted the claim, calling it misleading and economically detrimental to the industry, especially to some 650,000 oil palm smallholders in the country.

Malaysia is the world’s second largest palm oil producer after Indonesia.

The EU is the second largest importer of Malaysian palm oil after India, buying 12% of the total palm oil produced in 2018.

Data from the Malaysian Palm Oil Board showed the country exported 1.91 million tonnes of palm oil to the EU in 2018, down by 4% from 1.99 million tonnes recorded in 2017.

Fernandez said the EU representatives in Malaysia will continue to engage with relevant authorities, oil palm smallholders and local communities besides visiting plantations to gain first-hand knowledge of the issue.

“We are Malaysia’s very close partner and we need to overcome challenges like the palm oil issue,” she said.