It will open regional palm oil office in Tehran by mid-year
KUALA LUMPUR: Post-Trans-Pacific Partnership Agreement (TPPA) breakdown, Malaysia is pivoting towards the Middle East to sustain its export growth of palm oil.
The Cabinet on Wednesday approved the setting up of a regional palm oil office in Tehran, Iran, by mid-2017 to push the commodity into a new untapped market.
After Iran’s trade embargo was lifted in January last year, Malaysia has exported RM1bil worth of palm oil.
Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong wants to double that number by 2019.
He will travel on a five-day visit to Tehran, where Malaysia will meet with Iran’s Health, Finance, Trade Industry and Agriculture Ministers to discuss more trade for palm oil.
“Iran is strategically located and has big potential to be a buyer of our palm oil and be a centre for the region,” he said yesterday during a press conference here.
Malaysia will also set up a palm oil research centre in Mumbai, India - Malaysia’s biggest importer of the commodity, he said.
“There will be more of these missions to potential markets like Africa and South America. One of the reasons is because we are still disappointed by the TPPA. We actually had put a lot of hope on the TPPA,” he said.
The United States, the main backer of the TPPA, pulled out of the agreement after years of negotiations under President Donald Trump earlier this week.
Had the 12-nation free trade agreement (FTA) worked, Malaysia could have slashed taxes and import duties for 95% of its palm oil products, placing profit estimates at RM20bil by 2021 compared to the RM12bil we currently make.
Following the setback, Malaysia has been pursuing individual FTAs with other TPP nations and others like those in the European Union.
Although Mah expressed hope that Trump would come back to the negotiation table, he also openly called on China to “save the TPPA” and take the US’ place in the FTA.
“This is just my suggestion. Since the US doesn’t want it, we should consider China to take its place.
“They are the second-biggest world economy.
“We need another big player and this would help the other 12 countries,” he said.
Malaysia is still confident that it would grow its palm oil exports by 5% to 8% this year, with expectations of crude palm oil trading better this year, as an average price of RM2,700 to RM2,800 per tonne has been forecast for 2017 compared with about RM2,600 per tonne last year.