Malaysia Presses EU Lawmakers to Relax Deforestation Rules, Citing Risks to Small Farmers

Mumbai, 08 Oct 2024 (Commoditiescontrol): Malaysia has urged European lawmakers to adopt a more pragmatic approach toward proposed deforestation regulations, emphasizing the potential adverse impact on small-scale farmers. This appeal follows the European Commission’s suggestion to delay the enforcement of a law banning imports linked to deforestation by one year.

The postponement would offer producing nations, such as Malaysia, additional time to align their practices with the EU’s stringent sustainability criteria. Malaysia’s Plantation and Commodities Minister, Datuk Seri Johari Abdul Ghani, underscored that small farmers, in particular, would struggle to absorb the costs of compliance without more flexibility.

As the world's largest palm oil producers, Malaysia and Indonesia have consistently opposed the EU’s proposed regulations, deeming them protectionist and a threat to their export markets. The law, which targets soy, beef, coffee, palm oil, and other deforestation-linked products, was initially set to come into effect on December 30, 2024.

“In our discussions with the EU, we’ve expressed readiness to comply, but we require a grace period for our smallholders. The government will provide necessary support to ensure compliance,” Johari stated at a palm oil industry forum.

Malaysia’s palm oil sector includes approximately 450,000 smallholders, contributing to around 27% of the nation’s total palm oil production. Johari emphasized the need for transparent, consistent benchmarking to prevent unfair labeling of producing countries as high-risk under the new regulations.

“We expect the EU parliament to take a more flexible stance on this matter in the interest of trade fairness,” Johari remarked.

The EU law mandates that companies prove their supply chains do not contribute to deforestation, a requirement seen by Malaysia as overly stringent and potentially damaging to its rural farming economy.

In a separate statement, Johari said Malaysia does not foresee significant disruptions from India’s recent 20 percentage point hike in its basic import tax on edible oils. Malaysian palm oil exports remain resilient, bolstered by strong demand from India.

“We remain a dependable partner for India in supplying sustainable palm oil,” Johari assured.

Despite ongoing challenges, including labor shortages, Malaysia is poised to surpass 19 million metric tons of palm oil production this year, marking its highest output since 2020. The Malaysian Palm Oil Board forecasts production at 18.75 million metric tons in 2024.
(By Commoditiescontrol Bureau; +91-9820130172)