‘Plan B’ to boost commodity exports

KUALA LUMPUR: The government will look at other ways to increase commodity exports including bilateral free trade agreements (FTAs) and entering new markets, following the US’s withdrawal from the Trans Pacific Partnership Agreement (TPPA).
Plantation Industries & Commodities Minister Datuk Seri Mah Siew Keong said the government’s aim was to increase palm oil exports from RM13 billion now to RM20 billion by 2021 by tapping into the countries involved in TPPA.
“In the US now, the tariffs are between 3% and 18%. If the TPPA is implemented, with the reduction in tariffs, it would have been a big boom for our palm oil and commodities with the US,” he told reporters at the 19th Malaysia Strategic Outlook Conference 2017.
“With TPPA, more than 95% of palm oil products would not be taxed or imposed with import duties (to the US). Thus we are disappointed that President Trump has announced the withdrawal. We had policies and plans to increase commodities exports namely rubber, palm oil, cocoa and pepper to the US,” he said.
Mah said the government is hopeful of moving ahead with the remaining countries as a lot of work has already been poured into implementing TPPA.
In the meantime, the ministry will continue to increase commodity exports to existing markets and entering new markets.
“We are going to India next week to explore, to increase the Indian market for other commodities like rubber and timber … I will be meeting the buyers of oil palm and government contacts,” he said, adding that India is the biggest importer of Malaysian palm oil.
“The other TPPA countries like Peru and Chile in South America, these are big potential markets. We were looking at going into South America with our palm oil, rubber, pepper and cocoa. Maybe we can still explore the possibilities,” he added.
Despite the challenges facing the commodities sector this year, he is confident of a 5-8% increase in palm oil exports following a meeting with ambassadors of European Union countries last week and the impending FTA with Iran.
Meanwhile, the government hopes to make the Malaysia Standard Palm Oil (MSPO) certification mandatory. Mah said a meeting will be held with stakeholders next month and a decision will be made by end of February or early March.
“I would like to make it compulsory but due to cost constraints, limitations, it is not going to be easy. There are nearly 550,000 smallholders, how do you get everyone to do it? I have to talk to them,” he said.
He said the certification exercise would be expensive and difficult to implement as smallholders are spread out in various locations but the ministry is looking at certifying smallholders in clusters.
“I believe that we must do certification because now a lot of countries are trying to stop palm oil by saying that we are not certified. We need the certification. It is going to cost us money but I think that it is the way forward. To me, it is a matter of when we are going to make it mandatory,” he added.