Promoting Agricultural Value Chains:
In the OIC Member Countries
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expanded their downstream activities abroad by establishing oil palm refineries in consuming
countries, such as the Netherlands, India, Pakistan, Bangladesh, China and Egypt (Cheng,
2002).
The diverse actors in the palm oil value chain are well organised at the industry level. The two
most important associations are the Malaysian Palm Oil Association (MPOA) and the Malaysian
Palm Oil Council (MPOC). While both a private, industry-funded organisations, they have
strong ties to the Government.
The MPOA is the plantation owners’ association with a membership of 29 companies with
established palm oil plantations about 560,000 ha involving 274 estates and 36 palm mills. The
organisation represents the industry in several government bodies and related industry
organisations, including membership on the Board of the Malaysian Palm Oil Board (MPOB)
and Chairman of the Board of Trustees of the MPOC (Cheng, 2002). Similarly, the MPOC, which
is in charge of promotional and marketing activities of Malaysian palm oil, has close
connections to the Government, including the MPOB and the Department of Environment.
5.5.5 Trade
Palm oil from Malaysia is widely traded and used around the world. The major export
destinations are India, China and the EU. Exports from Malaysia increased steadily until 2012
and then experienced a drop in 2013 and 2014 (se . The slump is continuing in
2015 as low global energy prices have reduced the demand for biodiesel from palm oil and
record global oilseed supply, especially from soybeans, have reduced demand for crude palm
oil.
Figure 5-17 Palm oil exports from Malaysia, 1992-2014
Source: Index Mundi, 2015
Malaysia introduced a multi-tiered tax system in 2013 which puts a tax of 5 percent on the
export of crude palm oil. This is a “flexible” tax which is reviewed on a monthly basis, such that
it was in effect in April 2015 but expended for May 2015.
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