Malaysia Will Lobby Europe Against Palm Oil Ban – Plantation Minister

© Nikkei Markets

KUALA LUMPUR (Mar 21) — Malaysia’s Plantation Minister said Thursday she will visit Europe in early-May in a last-ditch effort to dissuade the European Union Parliament against adopting measures to phase out palm oil.

Prior to the tabling of the delegated act in May, “I’ll visit the government leaders again to explain to them [and] to push for sustainable palm oil,” Teresa Kok told reporters after a meeting with palm oil producers.

“A lot of their political leaders and MPs don’t understand the actual situation here,” she said. “Many of them have never come to Malaysia or visited oil palm plantations.”

Indonesia, the world’s largest palm oil producing nation, also planned to send envoys to protest the European Union’s plans to ban palm oil as biofuel by 2030, weekly magazine Tempo reported citing Coordinating Minister for Economic Affairs Darmin Nasution. 

– By Gan Pei Ling

Local, Foreign Parties Interested In Buying Malaysia Airlines – Mahathir

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KUALA LUMPUR (Mar 20) — Some local as well as foreign parties have shown interest in buying flag carrier Malaysia Airlines, Prime Minister Mahathir Mohamad said Wednesday.

“There are interested parties to buy Malaysia Airlines,” Mahathir told reporters in parliament. “We will study whether it needs to be sold or not.”

The comments come a day after state investment arm Khazanah Nasional’s managing director said it would inject this year part of six billion ringgit ($1.47 billion) that was provided in 2014 to revamp the financially-strained national airline.

Malaysia Airlines has been struggling to turn in consistent profits over the years despite several attempts by the government to restructure the company grappling with volatile fuel prices and brutal competition from low-cost carriers such as AirAsia.

The most recent effort was launched in 2014–involving massive job cuts, rebranding, management changes, and buying out the then-listed airline -following losses of two of its planes that killed hundreds of people in that same year.

The company, now wholly-owned by Khazanah Nasional, however has missed a crucial target to return to profitability by 2018 despite axing thousands of jobs and disposing of some of its planes.

An outright sale of the airline appears unlikely in the near term, said analysts, noting potential hurdles that include resistance from its highly-unionized workforce of 14,000.

“The turnaround probably hasn’t been successful,” said Singapore-based Brendan Sobie, an analyst for Centre for Aviation. “In this case, selling the airline is going to be challenging because Malaysia Airlines still needs a major overhaul.”

“It’s a national carrier so national interest is involved,” said Tan Kam Meng, an analyst who covers the aviation sector at brokerage TA Securities. “The company is also in a tough industry.”

Earlier this month, Mahathir had said that the government would study and soon decide whether to shut, sell or refinance the flag carrier.

“We will consider whether we want to change (the airline’s) management or to scale down or to expand,” Mahathir said. “We have a lot of planes that are not use fully utilized.”

– By Sarah Nadlin Rohim and Gan Pei Ling

Malaysia Hopes EU Commission Won’t Shortly Submit Draft Law To Ban Palm Oil In Biofuels

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KUALA LUMPUR (Mar 13) — Malaysia hopes the European Commission will not submit a proposed ‘delegated act’ to phase out palm oil in biofuels by 2030 in the next EU Parliament session even as the world’s second largest exporter of the commodity has no immediate plan to approach the World Trade Organization to resolve its differences over EU’s move on palm oil exports.

“As member of the WTO, Malaysia has an option to bring this palm oil issue to the Dispute Settlement Body in WTO, but it only can be made if we have the details and clarity of the new law on palm oil from the EU,” International Trade Minister Darrel Leiking said in parliament. “Then only Malaysia and other members that are affected by the ruling can see whether it is against WTO rules.”

The EU Commission is still discussing the so-called delegated act for Indirect Land Use Change, which once approved as law, will have a big impact to the palm oil industry, Leiking said. “So we will wait for more information before we take decision with our counterpart from other countries,” he added. 

Last month, the European Commission said the use of palm oil in motor fuel should be phased out because oil palm cultivation often leads to deforestation. Top palm oil producers Indonesia and Malaysia, which together control about 85% of global oil palm output, have repeatedly voiced their protest against the EU’s move and recently met the EU executive to discuss the issue.

“Our expert team has made a presentation to the European Commission and related bodies. We just hope the European Commission won’t table the delegated act to phase out palm oil in the European Parliament’s sitting in April,” said Teresa Kok, minister of primary industries.

The European Commission published a draft of the delegated act to phase out palm oil but not soybean on Feb. 8, a week later than its original deadline. The commission is expected to finalize the act this week that will give the European Parliament the required two months to review and potentially object to the act. The issue assumes importance as the European parliamentary election will be held in May. 

– By Sarah Nadlin Rohim and Gan Pei Ling

Malaysia ‘Cautiously Optimistic’ Of Members Ending RCEP Talks By Year-End – Ong

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KUALA LUMPUR (Mar 11) — Malaysia, which is currently focussing on a speedy conclusion of the Regional Comprehensive Economic Partnership or RCEP, is “cautiously optimistic” that participating countries can conclude talks by this year-end, the deputy international trade minister said Monday. 

“We make slow progress in terms of each session but I’m sure we’ll get to the end,” Ong Kian Ming told reporters on the side lines of an event. “The percentage of goods that will not be charged tariffs, whether it’s 70%, 90%, 80%…the number is still being deliberated by member countries. Some want more, some want less.”

RCEP is a free trade agreement being negotiated between the 10 countries in ASEAN with China, India, Japan, South Korea, Australia and New Zealand.

Meanwhile, Malaysia’s federal cabinet is still discussing pros and cons of joining the Comprehensive and Progressive Agreement on Trans Pacific, or CPTPP, Ong said. 

In March 2018, Malaysia signed the CPTPP that is expected to account for around 13.5% of global economic output and a market of 500 million people, sharply shriveled from its initial avatar – Trans Pacific Partnership, or TPP – which would have covered 40% of the global economy and 800 million people if U.S. had remained as a member of the trading bloc.

Malaysia, which once relied mostly on commodity exports – crude oil and palm oil – to earn precious foreign exchange has steadily turned into electronics manufacturing base for several transnational companies cranking out computers and digital storage devices for global shipments. Electronics and electrical items account for more than a third of Malaysia’s exports, which find ready takers in the region, China as well as in the developed Western markets. Over the years, Malaysia has forged strong trade ties with regional neighbours as well as other Asian power houses such as India and China to keep its factories humming with export orders. 

– By Gan Pei Ling

Malaysia’s Hibiscus To Spend $30 Mln To Develop UK Anasuria Cluster In FY19- MD

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KUALA LUMPUR (Dec 04) — Malaysian oil and gas company Hibiscus Petroleum plans to spend about $30 million to develop Anasuria cluster in UK in the fiscal year 2019 as the company aims to control production costs to shield against falling crude oil, its managing director said Tuesday.

Investment in Anasuria cluster hasn’t been sanctioned by the board yet, said Kenneth Pereira, managing director, in a press conference in Selangor. About 70 million ringgit ($16.86 million) has been sanctioned for North Sabah.

The company has deferred development of oil field in Australia due to high production cost, he said. It is exploring two funding options to raise between $50 million – $100 million to develop Australia oil field as the production cost is estimated to cost twice more than the company’s oilfields in the North Sea and North Sabah.

The company also aims to cap production cost at $15 and $20 per barrel for North Sabah and Anasuria Cluster in the UK, respectively, Pereira said.

“If the oil prices collapse below $40/barrel, I think we’ll have to be extremely careful but we’ll remain profitable,” said Pereira. “We don’t want to go there but we’ve been there before and survived.” 

– By Gan Pei Ling
– Edited by Sayantika Bhowal

Malaysia Aiming At Digital Identification System To Curb Fraud – Minister Deo

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KUALA LUMPUR (Oct 11) — Malaysia aims to introduce a national digital identification system to curb fraud, the federal Communications and Multimedia Minister Gobind Singh Deo said Thursday.

“The national digital ID would allow for trusted eCommerce transactions where both the seller and buyer are verified using a secure national digital ID system, eliminating elements of fraud and cheating,” Deo said at an e-commerce summit in Selangor.

The ministry is developing the system with the Communication and Multimedia Commission and Malaysia Digital Economy Corp.

Financial institutions and other stakeholders will be consulted soon, he added.

“I hope we can get something out by next year,” Deo said.

E-commerce contributed to 6.1% to Malaysia’s gross domestic product in 2016, according to official data. 

– By Gan Pei Ling
– Edited By Abhrajit Gangopadhyay