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Malaysia reassures Iran on palm oil as trade hopes build

Feb 10. 2017
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MALAYSIA’S Plantation Industries and Commodities Minister Mah Siew Sion, on a trip to Iran, has reiterated his message of recent weeks that palm oil is safe.

“I have convinced them that palm oil is harmless to human beings. This is an important step in prompting Iran to lower the tax,” Mah said.

“If Iran lowers the tax on palm oil from the current 40 per cent to 20 per cent like soya bean, this will benefit Malaysian palm oil.”

Mah led an economic and technical delegation representing oil palm, timber and rubber-related products to Iran on a three-day visit this week.

 “This will be a part of the free-trade agreement negotiations between Malaysia and Iran,” he said.

During his visit, Mah listened to the views of importers and businessmen in Iran, including various problems faced by them. Ultimately, the information will be included as part of the free-trade agreement.

Mah said that apart from issues related to the safety of palm oil, rubber and timber importers from Iran were also concerned about credits given by bank for payment.

Mah said he would raise the issue with the central bank and commercial banks in Malaysia to offer financing packages for companies dealing in exports.

“Both countries do not have direct trade but have to route through third parties such as Turkey and the United Arab Emirates due to sanctions. It was inconvenient.”

Mah said he met Iran’s Deputy Minister of Industry, Mines and Trade Mojtaba Khosrotaj. Both agreed to have direct trade. The latter also looked forward to implementing a trade agreement.

Iranian President Hassan Rouhani visited Malaysia last October. During his talks with Prime Minister Najib Razak on banking facilities, both agreed to promote bilateral trade especially in the oil and gas sector and the automobile, palm oil and tourism industry. The central banks of both countries would jointly create a feasible mechanism for the private sectors to trade effectively.

Najib said the central banks of both countries would meet soon. He expected trade between the two countries to achieve double-digit growth.

He said international sanctions had slashed Malaysia-Iran bilateral trade by half. Bilateral trade for the first half of the year had reached 1.03 billion ringgit (Bt8.1 billion). The figure was only half that recorded for the prior corresponding period.


Mah pointed out that the market for timber and timber-related products in Iran has huge potential but it was difficult for these products from Malaysia to enter its market. The main reason is the 55 per cent levy on import.

Last year, he said 30 million ringgit worth of timber and timber-related products from Malaysia were exported to Iran.

Mah said when he met Iranian Agriculture Jihad Minister Mahmoud Hojjati on Monday he raised the issue of restrictions imposed on export of timber to Iran.

“The minister said this was a misunderstanding and assured us that he would extend a helping hand to ensure there were no restrictions. This would help us to export timber to Iran.”

He said on January 18, the Dutch government announced that under its public purchase policy on sustainable timber, it recognises the Malaysia Timber Certification Scheme.

“This is an important announcement as Netherlands is a key importer of timber. It is strict with the certification. I have relayed the message to Iran’s minister. This will help us to export timber to Iran.”


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