Economy, Domestic Economy

Malaysia Hopeful of Boosting Palm Oil Exports to Iran

More than half of Malaysia’s total exports to Iran last year consisted of palm oil and  palm oil products.
More than half of Malaysia’s total exports to Iran last year consisted of palm oil and  palm oil products.

Iran’s Ministry of Agriculture believes Malaysia can have a better differential import duty for palm oil.

Announcing the above, the Malaysian government’s news agency Bernama said Malaysia is negotiating a further reduction of palm oil tariffs under a free trade agreement.

Currently, palm oil exported to Iran has a 40% import tariff, whereas other vegetable oils are only taxed 24%.

In 2014, the government of Iran imposed import quota on palm oil, whereby palm oil import were required not to exceed 30% of total oils and fats import.

As a result, imports dropped by 47% from 997,000 tons in 2013 to 330,970 tons in 2015 due to the import quota. 

In March 2016, the import quota was removed and replaced by a higher import tariff of 40% whereas other vegetable oils are only taxed at 24%.

Malaysia’s Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong said a bilateral discussion with Iran’s Agriculture Minister Mahmoud Hojatti had yielded a positive response to the request to reduce the import duty.

“But we still have to convince Iran’s health department. Besides protecting Iran’s homegrown oils, we were told the higher duty was due to health concerns over palm oil,” he told Bernama.

Iran’s Ministry of Agriculture is the authority responsible for the implementation, monitoring and enforcement of import tax for vegetable oils in the country.

Mah said he is positive Malaysia’s total export of palm oil and palm oil products to Iran will grow under a preferential or free trade agreement, from 453,172 tons worth $331 million achieved in 2016. 

“If we can get this 40% reduced, the export volume to Iran can surely increase by 30-40% by next year. That would be our key performance for 2018,” he said. 

Mah has been in Tehran since February 5 leading the Malaysian economic and technical mission on palm oil, timber and rubber products to Iran.

He claimed the challenge faced by palm oil in Iran was that of “misconception” as there had been several reports that conveyed a negative impression of it, especially from the health perspective.

These included a report by Iran’s local news agency on September 22, 2014, which quoted Majid Hajifaraji, president of the Iranian Nutrition Society and head of National Health and Food Technology Research Institute of Iran, as saying that palm oil increased the risk of cardiovascular diseases.

“But he had denied making such a statement,” Mah contended.

He said palm oil was a healthy and nutritional oil and thus, the misconception about it in Iran needs to be addressed.

According to Bernama, Malaysia has undertaken more than 150 nutritional studies by renowned research institutions globally, which show palm oil is a balanced and nutritional oil.

Red palm oil is a rich source of pro-vitamin A carotenoid that promotes a healthy lifestyle and it is also cost effective, with a balance of saturated and unsaturated fatty acids, the news agency added.

“We have now decided to be proactive in countering all the misconceptions. That is why we launched the Malaysian Palm Oil Board’s information booklet on the benefits of palm oil in Persian at the Malaysia-Iran Palm Oil Trade Fair and Seminar (POTS Iran 2017),” he said.

“We will continue to translate books on palm oil into Persian and engage with consumers here. Malaysia’s palm oil is currently exported to more than 160 countries and used in a multitude of applications.

Mah assured that there are no varying qualities of Malaysian origin palm oil.

“Malaysian palm oil is also safe, healthy and being cultivated with good agricultural practices,” he said.

During Jan.-Nov. 2016, trade between Malaysia and Iran was valued at about $580 million.

Exports from Malaysia to Iran were worth $440 million, of which commodity products contributed $350 million or 78.7% of total exports.

The main commodities exported during the period were palm oil products worth $270 million, timber products worth $7.6 million and rubber products valued at $60.7 million.

Apart from Malaysian Palm Oil Board and Malaysian Palm Oil Council, the visiting delegation in Tehran includes representatives of Malaysian Rubber Board and Malaysian Timber Council.

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