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Without limit, says Putrajaya in defense of the latest oil palm agreement with China



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An agreement recently signed in Beijing would lead state-owned China Oil and Foodstuffs Corporation to buy palm oil products from Malaysia in the next five years.

PETALING JAYA: The government has denied a claim that its recent agreement to sell palm oil and related products to China is subject to an annual limit of between 200,000 and half million tons over the next four years.

The ministry of primary industries said there were no such conditions in the memorandum of understanding between the Malaysian Palm Oil Council and the China Chamber of Commerce of Food and Native Products (CFNA) signed in Beijing last week.

"It is in addition to exports of palm oil to China by Malaysian exporters," he said in a statement to the FMT.

Former Prime Minister Najib Razak has shared a copy of the MoU, which shows the limits imposed on palm oil imports.

Najib, saying the MoU was based on an earlier agreement with China signed in 2015 by plantation industries and commodities minister Douglas Uggah Embas and by Chinese Foreign Minister Wang Yi said that Beijing has set no limits for imports of palm oil from Malaysia.

But the ministry said the MoU is only related to the quality and safety of local palm oil exported to China.

"There was no form of commitment or assurance from the Chinese government in the MoU of November 23, 2015 to increase imports of palm oil from Malaysia," he said, adding that the latest MoU forced the two countries to agree to an additional offer from a minimum of 1.9 million tons of palm oil to China over a five-year period.

"As a result of our negotiations, the Chinese authorities agreed to increase imports of palm oil from Malaysia."

According to a copy of the latest MOU shared online, China's state-owned China Food and Foodstuffs Corporation will buy RBD Palmolein, a refined, bleached and deodorized form of palm oil, based on the yearly limits set.

The document, whose authenticity could not be confirmed, said exports will be limited to 200,000 tons this year, 300,000 tons in 2020, 400,000 tons in 2021 and 500,000 tons in the following years.

In addition, he said that CFNA would encourage Chinese companies to expand the annual volume of palm oil purchases based on market-oriented buying.

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