Uggah: Malaysia restrict CPO imports

KUALA LUMPUR: Malaysia has issued a directive to traders that crude palm oil (CPO) imports will be restricted, to bring down the current inventory of 2.49 million tonnes to two million tonnes.  

Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas said the country aims to “bring down stocks at a comfortable level of about two million tonnes... give and take 5 per cent tolerance."  

He then highlighted this CPO import restriction directive is consultative. It was made known to the Indonesian government during the bilateral meeting in Jakarta over the weekend. 

"I brought this up in the recent bilateral meeting and explained the rationale to restrict CPO imports into Malaysia. The Indonesian government understood that we are trying to manage our stocks and accept it," Uggah said at a press conference after launching the Malaysian Palm Oil Board's International Palm Oil Congress and Exhibition here yesterday. 

The minister clarified this directive to traders in Malaysia is not an outright ban, as they can appeal to his ministry in cases where long term contracts have already been committed to. 

"I wouldn't call this a CPO import ban because traders can appeal to my ministry for exceptions. I prefer calling this move as managing stocks. We want to minimise Malaysia's CPO import volume," he said. 

"If we don't do anything now, palm oil inventory could exceed three million tonnes by November. For CPO imports that involve long-term contracts, they can appeal to my ministry," he added. 

Apart from the CPO import restriction, Uggah said the government plans to raise the biodiesel mandate from B7 to B10 in efforts to spur more palm oil consumption locally. 

He, however, declined to reveal the targeted date for the B10 biodiesel introduction. The B10 mandate is a blend of 10 per cent palm methyl ester and 90 per cent petroleum diesel. 

"We will present the B10 biodiesel proposal in the upcoming Cabinet meeting and continue to engage with industry players on this matter," Uggah said. 

On the conclusion of the Trans-Pacific Partnership agreement (TPP), Uggah said, "through the TPP, our palm oil, rubber, timber and value added derivatives should not face trade barriers in these member countries. We hope to see better market access and therefore rising exports to this trading bloc," he said.