Palm Oil Defence Offset the Way Forward, Says Kok

19 April 2019

Yak-130 Light Combat Aircraft (photo : The Avionist)

KUALA LUMPUR: Defence equipment procurement via offset deals is the way forward to prop up palm oil sales.

And with palm oil prices sagging, it may well save the jobs and business of millions of Malaysians, says Primary Industries Minister Teresa Kok.

She said such a barter trade would augur well towards increasing the export of palm oil and improving the nation’s trade balance with foreign countries.

“We most welcome such trade offset deals which will also save us foreign exchange, while boosting the sale of our palm oil,” she said in reference to Defence Minister Mohamad Sabu’s forthcoming visit to Russia on Saturday.

Mohamad is leading a high-level defence delegation to Moscow and is scheduled to meet Russian Defence Minister Sergei Shoigu and its President Vladimir Putin, during his four-day visit.

Mohamad is attempting to engage in billion-dollar trade-offs on defence and security procurement, including military aircraft, armaments and software, to spur palm oil sales via the transfer of technology and job spin-offs.

The New Straits Times understands that his visit concerns the future of the RMAF’s existing fleet of 18 Sukhoi Su-30MKM Flankers and the grounded MiG-29N Fulcrums.

Malaysia is also considering Russia’s offer of the fourth-generation Su-35 or even its latest Su-57E (the equivalent of the United States’ F-22), and eight units of Ansat, Mil Mi-8/17 and Kamov Ka-32A11DC from Russian Helicopters.

Also on the cards is the Yak 130 as a trade-in for the RMAF’s ageing lead-in fighter trainer, the Italian-made Aermacchi MB339.

Rostec State Corp’s international cooperation and regional policy director Viktor Kladov said Russia was committed to drastically increase its purchase of palm oil from Malaysia.

Mi-171A2 and Ansat helicopters (photo : Russian Helicopters)

Kladov had said that Russia was willing to buy Malaysian palm oil in substantial amounts to improve the bilateral trade balance, with the possibility of trade-offs for arms and defence procurement.

Kok added that many countries like Russia had shown a keen interest in using palm oil as a biofuel, including in the aviation sector.

“So, too, have other countries like India, China, Pakistan, Iran, Turkey, African nations and those from the Middle-East,” she said at the ‘5th Tan Sri B. C. Sekhar Memorial Lecture 2019’ at the Royal Selangor Club at Dataran Merdeka.

Kok added that the livelihoods of some 650,000 smallholders were at stake owing to the anti-palm oil lobby by Europe and the United States.

“Such destructive campaigns have discredited us for deforestation, loss of biodiversity, destruction of critical habitat for endangered species and labour issues,” she said.

And the RM22 billion required to bail out the Federal Land Development Authority (Felda) was of no help to the oil palm industry, either, she said.

“Palm oil is cholesterol-free and as good as olive oil for nutritional consumption, with an increasing demand for its use as edible oils.

“There have been no reported ill effects to health like causing cardiovascular disease, as claimed by some quarters.

“Therefore, the public should not shy away from consuming or using palm oil-based products,” she said.

Another industry player, who spoke on condition of anonymity, said that the drop in palm oil prices had caused a chain reaction.

“Many smallholders, transport operators, fertilizer suppliers and sundry owners have gone bust in Sandakan (in Sabah) and Gurun (in Kedah).

“Felda schemes are failing and planters are suffering,” he said, recounting how the nation managed to produce 20 million tonnes for last year, accounting to about RM48 billion.

Meanwhile, Malaysian Scientific Association’s past president Tan Sri Salleh Mohd Nor said genomics and molecular markers had been used to increase palm oil yield.

“There are an estimated two billion palm oil consumers, globally.

“But adverse publicity on palm oil, and its adulteration with additives and colouring agents are damaging it,” he said.

Malaysian Oil Palm Board biology advisory committee chairman Denis Murphy urged Malaysia to avoid a trade war but instead look at rebranding, increasing yields and extending the oil palms’ life span.

“You are not big enough to win. So, focus on being smart by forging partnerships.

“Also, avoid promoting biodiesel for motor-vehicles as manufacturers were rolling out power efficient cars,” he said.

Lecture organising committee chairman Ramachandran Nair warned that Malaysia risked being a sunset industry for commodities like palm oil and rubber by the next decade if drastic remedial actions, via partnerships, were not taken.

(NST)