Malaysia says it could stop palm oil exports to EU after new curbs

Malaysia said on Thursday it could stop exporting palm oil to the European Union in response to a new EU law aimed at protecting forests by strictly regulating sale of the product.

Commodities Minister Fadillah Yusof said Malaysia and Indonesia would discuss the law, which bans sale of palm oil and other commodities linked to deforestation unless importers can show that production of their specific goods has not damaged forests.

The EU is a major palm oil importer and the law, agreed to in December, has raised an outcry from Indonesia and Malaysia, the top producers.

"If we need to engage experts from overseas to counter whatever move by EU, we have to do it," Fadillah told reporters on the sidelines of a seminar on Thursday.

"Or the option could be we just stop exports to Europe, just focus on other countries if they (the EU) are giving us all a difficult time to export to them."

Environmental activists blame the palm oil industry for rampant clearing of Southeast Asian rainforests, though Indonesia and Malaysia have created sustainability certification standards mandatory for all plantations.

Fadillah, who is also deputy prime minister, urged the members of the Council of Palm Oil Producing Countries (CPOPC) to work together against the new law and to combat "baseless allegations" made by the EU and United States about the sustainability of palm oil.

CPOPC, which is led by Indonesia and Malaysia, has previously accused the EU of unfairly targeting palm oil.


REUTERS