Malaysia to review trade with France after palm oil restriction

[KUALA LUMPUR] Malaysia said it may review its trade with France and cut buying of French products following a move by France to limit the use of palm oil in biofuels.

France said on Thursday that it will take steps to restrict the use of palm oil in biofuels production in a bid to reduce deforestation in Malaysia and Indonesia, the world's top two producers of the tropical oil.

"Malaysia will also be compelled to evaluate its options that include trade with France and reduce buying of French products," Plantation Industries and Commodities minister Mah Siew Keong said in a press statement on Tuesday.

"I believe that for the Malaysia and France trade to continue to be strong and continue to grow, such attacks against the palm oil industry must stop. I also call on France and other European countries to work with us in addressing their concerns over sustainability."

Malaysia's trade ministry could not be immediately reached for comment.

The palm oil industry has faced widespread criticism for its links to deforestation, and is often accused of annual haze outbreaks in the region due to open burning being used as a cheap way to clear land.

The European parliament said in a non-binding resolution in April that it would only allow imports of environmentally sustainable palm oil into the European Union after 2020.

France has also opposed other uses of palm oil in the past.

The Indonesian Palm Oil Association (Gapki) said on Friday it was worried France's plan to reduce palm oil usage in biofuels could affect exports of the tropical oil by prompting other European nations to follow suit.

REUTERS