KUALA LUMPUR (April 18): Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani urged Malaysian commodity exporters to expand into new markets, and focus on producing high-quality products, as US tariffs grab the headlines.
“The US is not the only market we have. It shouldn’t be a case where one country can cripple your business — you need to expand your market. Forget about the tariffs; what we need to do is continue producing quality commodities that we can export,” Johari said.
He was speaking to reporters after witnessing the signing of a memorandum of understanding between the Malaysian Sustainable Palm Oil (MSPO) certification scheme and Nestlé (Malaysia) Bhd (KL:NESTLE) on Friday.
“When you offer quality products at a fair price, people will come and buy. For example, multinational companies like Nestlé — of course they want quality products. Otherwise, it would affect their brand,” he added.
Washington has imposed a 24% tariff on Malaysian goods, including commodities, entering the US, but there is a 90-day pause while negotiations to reduce the tariff are happening.
Malaysia currently exports about RM21 billion worth of commodities to the US annually, including palm oil, rubber products such as gloves, and cocoa. Of that, palm oil-related exports contribute RM4.9 billion, while rubber products account for RM8.2 billion.
Johari also noted that there had been no disruptions in the shipment of commodities — particularly palm oil and cocoa — since the US reciprocal tariffs were announced.
Malaysia, the world’s second-largest palm oil producer, faces a 24% tariff on palm oil exports to the US, while Indonesia, the largest producer of the commodity, was hit with a higher 32% tariff.
The lower tariff could give Malaysia a competitive advantage, said Malaysian Palm Oil Board (MPOB) director general Datuk Dr Ahmad Parveez Ghulam Kadir.
He noted that Malaysia exported one million tonnes of palm oil to the US last year, and hopes demand stays strong, without being replaced by other oils with lower tariffs.