PUTRAJAYA (Malaysia), Jan 29 (NNN-Bernama) — Malaysia will sign a memorandum of understanding (MoU) with Saudi Arabia’s Savola Group on three areas of cooperation to further enhance Malaysia’s palm oil exports in the region, the Ministry of Plantation Industries and Commodities (MPIC) said.
In a statement Saturday, the ministry said among the cooperation are the construction of a tank storage terminal in Jeddah, using Saudi Arabia as a re-export hub for Malaysian palm oil and a joint campaign to promote the goodness of Malaysian palm oil.
It said this was following a meeting in Jeddah between the Plantation Industries and Commodities Minister Zuraida Kamaruddin and Savola Foods board member Abdullah Rehaimi and chief sourcing officer, strategic sourcing and supply Dr Ghazi J Al-Sulaimani.
Zuraida said during the meeting, the three areas of cooperation were identified to further springboard exports of Malaysian palm oil and its derivatives to not only Saudi Arabia but also globally.
She said the construction of a tank storage terminal in Jeddah would help overcome logistic problems, demurrages and long waits for shipments.
“Dr Ghazi suggested that Malaysian exporters can keep their stocks at destination ports instead of Malaysian ports as this will also allow them to do ex-tank sales as well and cater to smaller players in the market.
“We supported the idea but stressed that Savola should get into a joint venture with Malaysian suppliers as our Malaysian companies have similar projects running in Pakistan and they are very successful,” she said.
She said the management of Savola agreed with the suggestion provided that the terms and conditions of the joint venture were fair and created a win-win situation for all parties involved.
On the cooperation of using Saudi Arabia as a re-export hub for Malaysian palm oil, Zuraida said this was because Saudi Arabia was ideally located to cater to the regional markets in the Gulf Cooperation Council (GCC) as well as North Africa region.
“It was agreed that having a palm oil hub in Saudi Arabia will not only enhance the volume of Malaysian palm oil usage in Saudi market significantly but will also enable Malaysian exporters to cater to smaller markets in the region.
“Abdullah (from Savola Foods) added that developing a ‘Food Hub’ is also in line with Saudi Vision 2030 which aims to provide food security to the entire region,” she said.
She said if the idea is realised, the export potential of Malaysian palm oil to this region could be tripled.
On the joint campaign to promote the goodness of Malaysian palm oil, Zuraida said she gave Savola management a background of the baseless anti-palm oil campaigns spearheaded by the western non-governmental organisations (NGOs), which are purely triggered by protectionist policies.
“Savola management fully agreed and added that the influence of these anti-palm oil campaigns will reach this region sooner or later and we should develop a strong positive image of palm oil and educate our consumers about its various health benefits.
“These collaborations will not only strengthen our position in the market but also suppress negative assumptions against the industry and help Malaysia maintain its spot as a global market leader in palm oil,” she said.
In 2021, Malaysia’s palm oil and palm oil product exports to Saudi Arabia amounted to RM1.71 billion (US$408.1 million), which is 30.7 per cent higher than 2020.
— NNN-BERNAMA