PUTRAJAYA: The newly imposed 24 per cent tariff by the United States on Malaysia may initially disrupt export flows but the country has a competitive edge over major palm oil producers, according to the Malaysian Palm Oil Board (MPOB).
Its director-general, Datuk Dr Ahmad Parveez Ghulam Kadir said although the tariff affects global exports, Malaysia’s comparatively lower tariff rate offers a slight advantage over Indonesia and Thailand, which are facing 32 per cent and 36 per cent tariffs, respectively.
“Of course, it will initially affect us because there will be disruptions and whatnot. But if you look at palm oil – especially for the US – they still need a lot of it for certain markets like confectionaries.
“These are products which depend on palm oil due to their trans fat policy and others,” he told reporters after the signing of a licensing and commercialisation agreement between MPOB and SumiSaujana Group Bhd here today.
The agreement aims to leverage MPOB-owned technology to manufacture and commercialise palm-based intermediates, palm-based polyols, and bio-based polyester polyols.
Ahmad Parveez also said that the US palm oil market is relatively small for Malaysia, accounting for only about one per cent of total palm oil exports. However, it remains significant due to its niche applications.
“What is important is that palm oil in the US is mostly used as a specialty oil, not for general cooking. So, the demand will still be there. It may have some impact initially, but eventually, it will not become a major issue,” he explained.
On market diversification, Ahmad Parveez said Malaysia continues to strengthen its global footprint and is not reliant on any single market.
“Whatever happens in Europe — with the Regulation on Deforestation-free Products (EUDR), previously the Revised Renewable Energy Directive (RED II), and now with the US tariff — we believe the ones who will suffer are their consumers.
“For us, we are moving beyond commodity palm oil to high-value applications,” he said.
Ahmad Parveez added that Malaysia recorded a significant increase in exports to the Philippines last year and continues to pursue new opportunities across ASEAN and other key regions.
“Now that Malaysia is chairing ASEAN, we hope to boost exports within the region. The most important thing is to maintain strong relationships with all palm oil-consuming countries,” he said.
Earlier today, research house CIMB Securities said Malaysian palm oil exports to the US will be subject to a 10 per cent import tariff starting immediately, and beginning April 9, US tariffs will increase to 24 per cent for Malaysian palm oil and 32 per cent for Indonesian palm oil.
It said these tariffs will raise the cost of palm oil for US end-users and the tariff-induced price increase is likely to drive US food manufacturers and consumers to substitute palm oil with more competitively priced domestic alternatives, such as soybean oil.
In 2024, Malaysia exported 191,000 tonnes of palm oil to the US, representing around 10 per cent of the US’ palm oil imports and 1.1 per cent of Malaysia’s total palm oil exports.
