Malaysian palm oil plantations unaffected by US tariffs as most inputs sourced domestically, says minister, with new replanting scheme planned
KUALA LUMPUR: The Ministry of Plantation and Commodities confirmed that US tariffs have not impacted input costs for Malaysian oil palm plantations.
Minister Datuk Seri Johari Abdul Ghani stated most inputs used in oil palm cultivation are sourced domestically.
“Only some chemicals and fertilisers, including nitrogen, phosphorus and potassium fertilisers, are imported, but these do not go through the United States,” he told Parliament.
Johari was responding to queries about potential agricultural input cost increases from the US-Malaysia Agreement on Reciprocal Trade.
The ministry is developing a new scheme to help smallholders with rising replanting costs for implementation next year.
Johari plans to meet bankers to explore loan options for smallholders using their farms as collateral.
He will seek government interest subsidies of up to 4% to make loans more affordable for smallholders.
The Ministry of Plantation and Commodities is negotiating with the Finance Ministry regarding the proposed interest subsidy.
Current assistance includes the Smallholder Oil Palm Replanting Financing Incentive Scheme offering 50% grants and 50% loans.
The government allocated RM100 million for the scheme in 2024 and RM50 million for 2025.
Malaysia could lose nearly RM7 billion in export revenue without replanting of oil palms over 25 years old.
The country’s current oil palm replanting rate stands at around 2%, below the targeted 4-5% annual rate. – Bernama
