TAWAU: The new tariff rates proposed by the United States for 90 countries, including Malaysia, on April 2 are not expected to significantly impact the prices of the country’s export commodities, especially palm oil.
Deputy Minister of Plantation and Commodities Datuk Chan Foong Hin said that this is because the US only imports about one per cent of Malaysia’s palm oil commodities.
However, he cautioned that the impact of the tariffs could potentially disrupt market sentiment and demand for commodities.
“The US is not a major market for Malaysia’s palm oil because the country itself produces soybean oil. If we look at it, the US is a competitor in the oil market. So, it should not affect palm oil that much.
“But it may affect demand because uncertainty is high, so that is why it will impact demand, and exports might drop slightly. However, looking at the tariff rate imposed on Malaysia, which is lower compared to Indonesia’s 32 per cent, it shows that Malaysia’s palm oil remains competitive,” Chan said after launching the Smallholder Palm Oil Replanting Financing Incentive Scheme (TSPKS 2.0) here on Thursday.
On April 2, Donald Trump announced a series of “reciprocal tariffs” on imports from about 90 countries, which included an overall 10 per cent tax on all imports into the US.
This move directly raised import duties on several of Washington’s key trade partners, including Malaysia, which faced a 24 per cent tariff.
Chan also mentioned that the US had reported a 90-day postponement on tariffs for 75 countries, including Malaysia, and this may provide an opportunity for Malaysia to engage in further negotiations.
“With this 90-day postponement, I am confident that a delegation from the Ministry of Investment, Trade, and Industry (Miti) and the National Geoeconomic Command Centre (NGCC) will be sent to the US to negotiate on this tariff issue,” he said.
Addition, Chan emphasised the need to diversify palm oil export destinations and reduce reliance on traditional buyers.
“We place great importance on developing markets in regions such as Africa and the Middle East, which are among the areas we target.
“At the same time, we also maintain good relations with our palm oil trading partners such as India, China, and the European Union,” he said.
Malaysia’s palm oil exports rose 0.91 per cent in March 2025 to 1.00 million tonnes from 996,460 tonnes in February, the Malaysian Palm Oil Board (MPOB) said.
In its March 2025 industry performance report, MPOB said crude palm oil (CPO) production climbed 16.76 per cent, or 199,164 tonnes, to 1.38 million tonnes from 1.18 million tonnes in the previous month.
Palm kernel output increased 18.23 per cent to 336,918 tonnes in March from 284,959 tonnes in February.
Crude palm kernel oil production rose 15.20 per cent to 149,923 tonnes from 130,146 tonnes, while palm kernel cake output advanced 20.74 per cent to 172,655 tonnes from 142,997 tonnes.
CPO stocks fell 5.68 per cent to 779,233 tonnes in March, compared with 826,145 tonnes a month earlier.
Processed palm oil stockpiles grew 14.63 per cent to 783,353 tonnes from 683,380 tonnes in February, while total palm oil inventories increased 3.52 per cent to 1.56 million tonnes from 1.50 million tonnes.
MPOB said palm kernel oil exports slipped 3.11 per cent to 56,333 tonnes in March from 58,144 tonnes in February.
Palm kernel cake exports tumbled 36.90 per cent to 122,977 tonnes from 194,894 tonnes, while biodiesel exports dropped 64.46 per cent to 14,947 tonnes from 42,052 tonnes.
Oleochemical exports, however, rose 5.74 per cent to 209,610 tonnes from 198,238 tonnes a month earlier.
No CPO imports were recorded in March, while palm kernel oil imports edged down 0.17 per cent to 12,678 tonnes from 12,699 tonnes in February.
