'95pc of palm oil to China meets rules'

BANGI, Selangor: THE  Malaysian Palm Oil Board (MPOB) assures that 95 per cent of palm cooking oil shipments into China have  met the quality control specifications introduced there since 2009.

"Based on information given by Chinese authorities, only five per cent of the shipments did not meet the specifications," said MPOB director-general Datuk Dr Choo Yuen May.

"Analysis of these shipments showed that non-compliance is mostly related to excessive free fatty acids," she said in an email to the New Straits Times.

These off-specification shipments were likely to have been shipped from Malaysia when the quality of oil was near expiry but still within the limits set by Palm Oil Refiners' Association of Malaysia (Poram). "This would result in the oil being non-compliant with China's specifications when it reached the seaports there."

Choo was responding to concerns raised by Poram that enforcement of China's new quality control rules exposes palm cooking oil shipments to risks of rejection for reasons exporters have no control over. This dilemma is seen to have wide implications because China is Malaysia's biggest trading partner.

One of Malaysia's significant exports to China is palm oil for use by food processing companies.
Every year, China spends some US$4 billion (RM12.3 billion) to buy close to four million tonnes of the kitchen staple from Malaysia.

Poram chief executive officer Mohammad Jaaffar Ahmad reportedly said China's enforcement of the new rules from Jan 1, was not the usual business practice and could open the floodgates for other palm oil importers to demand the same. This indirectly puts exporters at risk of being manipulated by clients without any explicit avenue to  legal redress or compensation. 

Palm oil shipments into China that do not meet the new specifications would be turned away. "We were told that off-spec shipments will no longer be allowed to be re-refined on China's shores. What redress can Malaysian exporters avail to? This leaves Poram no choice but to advise members to trade at their own risk when selling palm cooking oil to China," Jaaffar said.

Choo assured palm oil exporters that MPOB's office in Shanghai had been engaging China's Administration of Quality Supervision, Inspection and Quarantine body to extend the enforcement grace period for the 2009 rule.

The Chinese authority, however, reiterated that the enforcement was applicable to all imports of edible oils. This move is fuelled by China's efforts to improve the safety and quality of imported products.

Choo said palm oil exporters had to comply with China's quality controls as the 2009 standards were internationally harmonised. "MPOB can only do its part if the standards imposed proved to be discriminating against palm oil," she said.