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WEDNESDAY | JULY 9, 2025

US consumers ultimately the ones to bear higher palm oil prices: Johari

Ű BY JOHN GILBERT sunbiz@thesundaily.com

“When it comes to palm oil specifically, there is essentially no alternative available in the US market. Soybean oil cannot be converted into the same oleochemicals that our palm oil products provide. “If the US imposes a 25% tariff on our products, it will ultimately be American consumers who bear the additional cost,” he told reporters at Malaysia Palm Oil Council’s trade networking visit with international buyers yesterday. Using rubber gloves as an example, Johari stated that Malaysia is not the only producer; China and Vietnam also manufacture them, and their exports face similarly high US tariffs, in some cases even higher than those imposed on Malaysia. “This creates a highly competitive environ ment. The same applies to furniture; many countries produce furniture, including Malay sia. “Ultimately, buyers make their decisions based on design and quality. If our designs are unique and appealing, there will still be

demand, even if tariffs raise the final price. “If the US imposes tariffs of 10% plus 25% or 5% plus 25%, that simply becomes part of the cost for buyers,“ Johari said. Touching on exports, Johari said that last year, 40% of Malaysia’s palm oil exports were directed to North Africa, Sub-Saharan Africa and Asean markets, beyond Malaysia’s tradi tional trading partners. Exports to North Africa increased by 63.5% in 2024, while Sub-Saharan Africa saw a 26% year-on-year rise during the first five months of 2025. Johari said that this growing reliance on Malaysian palm oil to meet edible oil requirements highlights the importance of strengthening long-term partnerships and ensuring efficient and stable supply chains. “Each region represented here today has distinct drivers of palm oil demand. In North Africa, Egypt serves as a strategic re-export hub, supplying markets across the region. In Sub Saharan Africa, demand is rising for industrial applications, particularly in food processing,

whereas in Asean, rapid growth in refining and food manufacturing continues to drive the need for high-quality and reliable palm oil supply.” Johari said that by supporting the de velopment of the downstream sector, Malaysia aims to embed its palm oil more firmly into local and regional value chains, adding economic value beyond the supply of raw materials. “This approach not only strengthens supply chain integration, but also encourages joint ventures, technology transfer and local pro cessing partnerships, fostering a long-term, resilient and shared industrial growth.” At the networking session, Johari said that for many decades, Malaysia has been a top producer of palm oil in the world. The palm oil plantation area in this country covers roughly 5.7 million hectares across Peninsular Malaysia, Sabah and Sarawak. The commodity is an export-oriented sector for the Malaysian economy, with 15.4 million tonnes out of the 19.3 million tonnes, or 80% of the palm oil produced was exported in 2024. KUALA LUMPUR: Malaysia is committed to continued engagement with the United States towards a balanced, mutually bene ficial, and comprehensive trade agreement, said the Ministry of Investment, Trade and Industry (Miti). The ministry highlighted that Malaysia values its longstanding economic and trade relationship with the US and recognises the important role of open and fair trade in supporting jobs and economic growth in both countries. “The Government of Malaysia takes note of the recent announcement by the US Government regarding the imposition of a reciprocal tariff rate of 25% on Malaysian exports to the US, effective Aug 1. “Miti will continue discussions with its US counterparts in good faith to address outstanding issues, clarify the scope and impact of the announced tariffs, and pursue avenues for the timely conclusion of our negotiations,“ it said in a statement yes terday. According to Miti, these efforts are ongoing and reflect Malaysia’s commitment to reaching a fair and sustainable outcome for both parties. “While we acknowledge the concerns raised by the US regarding trade imbalances and market access, we believe constructive engagement and dialogue remain the best path forward. “Malaysia strongly believes that, together, we can find mutually acceptable solutions that safeguard the interests of both countries and peoples, while ensuring that bilateral trade and investment continue to be a positive force for sustainable economic development,” it added. The ministry also stressed that the government remains committed to pro tecting the interests of Malaysian businesses, workers, and consumers and will take all necessary steps to mitigate the impact of these new measures. The US is Malaysia’s second largest trading partner and largest export destination, with total trade in 2024 rising nearly 30% to RM324.9 billion. Exports to the US reached RM198.7 billion), while imports rose to RM126.3 billion. – Bernama We’re committed to continued engagement: Miti

KUALA LUMPUR: Malaysia will not be significantly impacted by the newly imposed US tariff of 25% as the country primarily exports products to the US that cannot be easily sourced or substituted domestically. Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said the tariff hike announced on Monday – raising duties on Malaysian goods from 10% to a combined 25% – targets a range of exports, but Malaysia’s unique position in the global supply chain offers some protection from the effects. “We are not the only country affected by these measures. What I want to emphasise is that, out of our total exports valued at RM186 billion, only about RM20 billion are exported to the US. “Within this RM20 billion, our main exports to the US include rubber products, such as rubber gloves, furniture and wood products, oleochemicals, including palm oil and cocoa.

Trump unveils new tariffs but leaves room for deals

NEW YORK: US President Donald Trump said on social media on Monday that 25% tariffs will be imposed on imports from Japan and South Korea, respectively, beginning Aug 1, reported Xinhua. In his letters addressed to the leaders of the two countries, Trump said the new tariffs will be separate from all other sectoral tariffs. He later announced that similar letters were sent to the leaders of 12 other countries, namely Malaysia, Kazakhstan, South Africa, Myanmar, Laos, Tunisia, Indonesia, Bangla desh, Serbia, Bosnia and Herzegovina, Cambodia and Thailand, informing them that tariffs ranging 25% to 40% will be charged starting next month. The tariffs rate on Malaysia, Kazakhstan and Tunisia will be 25%, and it will be 30% for South Africa, and Bosnia and Herzegovina. Indonesia will face a tariffs rate of 32%, and Bangladesh and Serbia will see 35%. Tariffs rate on Cambodia and Thailand will be 36%, and for Laos and Myanmar it will be as high as 40%. In the almost identical letters, Trump asked leaders of these countries to under stand that the tariff number “is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country.” Trump warned that if these countries raise their tariffs in response, the US will increase its tariffs by the same amount. He said that there will be no tariff if these countries or their companies decide to build or manufacture products within the US, and that “in fact, we will do everything possible to get approvals quickly, professionally, and routinely – In other words, in a matter of weeks.” o Extra levies of 25-40% on imports from 14 countries to take effect from Aug 1

Leavitt shows a letter from Trump addressed to South Korean President Lee Jae-myung as she speaks during the daily briefing in the White House in Washington, DC, on Monday. Trump said he was slapping 25% tariffs on Japan and South Korea, in his first letters to trading partners ahead of a deadline to reach a deal with Washington. – AFPPIC

He also said that “if you wish to open your heretofore closed Trading Markets to the United States, and eliminate your Tariff, and Non Tariff, Policies and Trade Barriers, we will, perhaps, consider an adjustment to this letter”. White House Press Secretary Karoline Leavitt said on Monday afternoon that Trump plans to issue an executive order to extend the pause on “reciprocal tariffs” from July 9 to Aug. 1.

“So, the reciprocal tariff rate or these new rates that will be provided in this corres pondence to these foreign leaders will be going out the door within the next month or deals will be made,” said Leavitt. Last Wednesday, Trump said that the US had struck a trade deal with Vietnam that includes a 20% tariff on the Southeast Asian country’s exports to the United States. – Bernama Xinhua

See also page 14