Malaysia Dedicates RM 10 Million to Advance Palm Oil Traceability App

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Doc. Sawit Fest 2021 / Hendra / Malaysia Dedicates RM 10 Million to Advance Palm Oil Traceability App

PALMOILMAGAZINE, KUALA LUMPUR – The Malaysian Ministry of Plantation and Commodity has taken a significant stride towards sustainability by committing nearly RM 10 million in investment for the development of a traceability system within the palm oil supply chain industry.

This system is designed to meticulously oversee the supply chain processes for approximately 500,000 smallholders in Malaysia. Its purpose is to ensure that Malaysia aligns with the stringent regulations imposed by the European Union, specifically the European Union Deforestation Regulation.

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Scheduled to be launched by Prime Minister Datuk Seri Anwar Ibrahim on November 8, 2023, this new system aims to offer substantial support, particularly to smallholders and planters within the country’s palm oil industry. In the past, many smallholders struggled to consistently and accurately document their activities. The absence of precise data made it challenging to provide effective guidance related to smallholders’ plantation operations, including costs and profits.

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General Director of Malaysian Palm Oil Board (MPOB), Datuk Ahmad Parveez Ghulam Kadir said that the system would record fresh fruit bunch (FFB) transaction from smallholders that need traders as hub, but also would involve every supply chain, starting from the planters to the industries, mills, dealers, and personal smallholders in every production phase to be traded carefully and in detail.

One big challenge is about to confirm the obedience in the latest sustainable certification in the country – Malaysian Sustainable Palm Oil (MSPO) that covers the terms and conditions in European Union Deforestation Regulation (EUDR). These demand every actor in palm oil production to prove that they were not contributing in deforestation or forest degradation. To qualify the conditions, Malaysian Palm Oil Board (MPOB) started to map agricultural locations carefully where the smallholders cultivate. This would confirm traceability of product and be the solution of obedience in safe cost.

Ahmad Parveez also emphasized that this is important knowing that Malaysia is facing risks in palm oil trade with European Union. By delivering detail that the products from high risk – countries should surpass due diligence up to nine percent; while the products from low risk – countries need to get one percent – due diligence. He told that this is about to confirm that Malaysia is in low risk – country – category.

In facing complexity in palm oil industries that involve thousand planters and hundred thousand of smallholders, the proactive things are not easy tasks. Having limited staffs but about 250 thousand smallholders, this work would be full of challenge.

“But this is important to confirm that every smallholder is not left behind in palm oil trade landscape change,” he said as quoted from Business Time.

What MPOB is doing would also involve to map agricultural location carefully where the smallholders are cultivating. This initiative would help not only to qualify the conditions in EUDR but offer solution of obedience in safe costs.

“Failure to qualify EUDR would endanger palm oil trade to European Union. These proactive actions would be very important,” he said. (T2)

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