KUALA LUMPUR — The United States’ restrictions or market challenges are unlikely to significantly disrupt Malaysia’s palm oil industry, according to Plantation and Commodities Minister Datuk Seri Johari Ghani.
He noted that Malaysia exported 191,231 metric tonnes of palm oil to the US in 2024, which accounted for only 1.1 per cent of the country’s total exports. With such a small market share, the direct impact of any trade limitations from Washington is expected to be negligible.
Johari emphasised that Malaysian palm oil holds unique advantages. Certified sustainable under the Malaysian Sustainable Palm Oil (MSPO) standard, the commodity provides functional qualities that are difficult to replicate with alternatives. This, he said, makes US industries relatively dependent on sustainable palm-based products.
Malaysia, the world’s second-largest palm oil producer after Indonesia, continues to play a central role in the global edible oil market. Palm oil remains essential across multiple industries, from food products such as cakes, margarine and frying fats, to consumer goods like soap, shampoo and cleaning products. India and China are the top importers of Malaysian palm oil, followed by the European Union and Turkey.
Johari further highlighted the resilience of the domestic industry, pointing out that around 70 per cent of national output comes from estates and plantation companies with strong export presence. At the same time, the government continues to support smallholders through schemes such as the Replanting Financing Scheme and grants to help combat diseases like Ganoderma basal stem rot.
In Parliament, Johari explained that various financing initiatives are available to strengthen smallholder competitiveness. These include interest-free loans of up to RM300,000 under the Easy Financing Scheme (SPM), a RM100 million replanting scheme in collaboration with Agrobank, and targeted grants of up to RM200,000 for weighing centres under the Sustainable Palm Oil Growers’ Cooperative. Additionally, RM50 million from Budget 2025 has been allocated to support MSPO certification costs, covering training, documentation, certification and safety equipment.
Addressing concerns about the rubber sector, Johari reminded lawmakers that Malaysia contributes just 3.3 per cent of global output, limiting its influence on international prices. Nonetheless, the ministry has rolled out measures such as the Rubber Production Incentive (IPG), with the activation price raised to RM3 per kilogram, the Latex Production Incentive (IPL+) to encourage latex output, and the National Rubber Industry Transformation Programme (TARGET) aimed at increasing smallholder income through value-chain participation.
Johari’s remarks were in response to queries from MPs on the government’s short- and medium-term plans to mitigate challenges arising from the US market and the broader decline in global commodity prices. He reaffirmed the ministry’s commitment to safeguarding smallholders’ livelihoods while ensuring Malaysia’s commodities remain competitive internationally.
