Key Note Address by Datuk Seri Mah Siew Keong, Honorable Minister for Plantation Industries & Commodities, Government of Malaysia at Globoil India on 14th September, 2017

Mr Atul Chaturvedi
President, Solvent Extractor’s Association, India
Mr. Jesus Silveyra
Joint Secretary, Govt. of Argentina
Mr Sandeep Bajoria- Chairman Globoil Managing Committee, Mr Kailash Singh and of course Dr Mehta
Honoured Guests, Distinguished Speakers, Members of the Press, Ladies and Gentlemen,
Namaste, a warm welcome, and a very good morning to everyone.
It is indeed an honour for me to be invited to speak at the 21st edition of the Globoil India. I would like to take this opportunity to thank the Solvent Extractors’ Association of India (SEA) for the invitation and please allow me to also congratulate you for successfully organising this event for the last 20 years.
2. I have been informed that today’s event is attended by more than 1,500 participants from across the globe, with 100 companies exhibiting their products and services, and 40 speakers will be deliberating on various subject matters. This event establishes India’s role and position as an integral component and an important global market for trade, manufacturing and utilization of vegetable oils and fats, more so the growing importance of palm oil in meeting the rising demand from the Indian consumers, trade and industry.
Distinguished Guests, Ladies and Gentlemen,
3. India’s emergence as one of the world’s biggest economic power house is reflected in its projected household spending exceeding US$300 billion by year 2020. With a large population of 1.3 billion, India has over the years become an important oils and fats market. Since oils and fats are an important component of the human diet, any increase in population density globally and changing consumer habits will lead to a higher demand and consumption of oils and fats. This is further fuelled by the rising income and expanding urbanization in India. India consumes more than 23 million tonnes of oils and fats or 11% of the total consumed globally. This makes India the largest importer of oils and fats, accounting for 18% of the total world’s import of all oils and fats.
Distinguished Guests, Ladies and Gentlemen,
4. India is an important trading partner for Malaysia. In 2016, exports of Malaysian products into India accounted for 32.01 billion Ringgit (USD 7.60 Billion), making India the fifth largest trading partner for Malaysia. Malaysia’s imports from India is rather diversified, and includes meat and meat products, sugar, rice, wheat, fresh vegetables and fruits, cotton yarn, iron, steel and metals, fabrics, machinery and instruments, electronic goods.
5. India, on the other hand, imports crude petroleum and petroleum products, palm oil products, electrical and electronic goods, wood products and chemicals products from Malaysia. Among all these imports, palm oil is the main commodity that plays a significant role in the trade between both countries. In 2016, the export value of palm oil and palm-based products to India was 3.13 million tonnes valued at around at US$2 billion. However, today we see challenges in maintaining Malaysian market share in India, especially with the recent changes in the duty structures of imported edible oils announced by the Government of India. However, Malaysia will continue to work closely with our Indian counterparts to invigorate new trade and business opportunities in the palm oil sector covering both the food and non-food sectors.
6. In terms of production, palm oil is the largest vegetable oil produced globally, accounting for 29% or approximately 59 million tonnes of the total oils and fats output of 204.6 million tonnes in 2016. In terms of global trade of edible oils, palm oil accounted for 55% or 43.7 million tonnes of the total 80 million tonnes of oils and fats exports in 2016. The palm oil industry has become the backbone of the agriculture sector in Malaysia. It has been recognised by the World Bank as a vehicle to alleviate rural poverty and provides employment opportunities to more than 2 million people, including 650,000 smallholders in Malaysia. Last year, the total output of crude palm oil from Malaysia stood at 17.3 million tonnes or 29.4% of the global palm oil production.
Distinguished Guests, Ladies and Gentlemen,
7. The development of the palm oil industry is not without its challenges. The cultivation of oil palm has been subjected to various unjustified claims from environmental organisations and consumer advocacy groups who claim that it contributes to deforestation, loss of biodiversity, and destroys critical habitat for endangered species. It is vital to understand that there are many drivers of deforestation. For example, the Union of Concerned Scientists have established that livestock and soya are the major contributors of deforestation.
8. It is important to note that in the case of Malaysia, only 5.74 million ha is planted with oil palm accounting for 17.4% of Malaysia’s total land area. Malaysia continues to maintain a forest cover of 55.2% unlike most developed nations, who cannot claim similar forest cover in their own backyards. Despite these challenges, the Malaysian palm oil industry will continue to work to enhance its sustainability credentials by proving its commitment towards sustainable development of the sector. The industry’s well established track record is a proof that the palm oil industry has and will continue to focus on environmental protection.
9. To meet consumer demand for certified and sustainable palm oil (CSPO), Malaysia has established the Malaysian Sustainable Palm Oil (MSPO) scheme which will be made mandatory by 2019 for players in the industry. This will ensure that the smallholders can also participate in a certification scheme and find new export markets for their oil in future. The Malaysian Government’s commitment towards sustainability is well reflected by the recent incentive of USD30 million provided for oil palm smallholders to enable them to obtain the Malaysian Sustainable Palm Oil (MSPO) certification. I look forward to working with my counterpart here in India to ensure MSPO is recognised by the Government of India so that you can also contribute towards sourcing and promoting sustainable palm oil from Malaysia.
Distinguished Guests, Ladies and Gentlemen,
10. This year, marks 100 years of Malaysian palm oil since its first commercial planting in 1917. It has been an incredible journey not only for the industry but also for the country. These achievement is also a testimony of the good relationship forged between Malaysian and Indian companies such as Tata, Birla and the Allana Group in establishing palm oil refineries in Malaysia during the early days. I would like to thank the Government of India and the Indian companies as this journey would not have been possible without the support and goodwill of important trade partners like India. In conclusion, I would like to reiterate that the Malaysian palm oil industry values its partnership with India and I am optimistic that this good relations will continue to prosper. After all, we share similar goals in sustainable agriculture that can reduce poverty, provide a better standard of living and a sustainable income for our framers.
11. Once again, I would like to express my sincere appreciation to the Solvent Extractors Association for inviting me to this event. I trust all delegates will benefit from the many papers that will be presented and the deliberations that will take place at this conference.
Thank you.
Ministry of Plantation Industries and Commodities
14 September 2017