Malaysia is considering a law to remove products with anti-palm oil labels from market shelves as it looks to take action against any unfair treatment of its second largest commodity export, the Malaysian Reserve reported on 4 September.

Primary Industries Minister Teresa Kok said a proposal to ban products with anti-palm oil labels was being prepared by the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP).

“We are looking into putting this matter under one of the KPDNHP’s regulations,” the Malaysian Reserve quoted Kok as saying. “We have mentioned this and the KPDNHP is studying the proposal.”

The country’s biggest supermarket, Mydin, had already pledged to ban such products from its shelves, Cosmetic Design wrote on 11 September.

Kok supported Mydin’s decision and urged other supermarket chains in Malaysia to do the same.

Palm oil is found in many consumer products – such as chocolate bars, personal care products and cosmetics – and is also a biodiesel feedstock. Its use has attracted controversy due to deforestation and environmental concerns.

The EU, for example, has defined palm oil as a high-risk indirect land use change (ILUC) biofuel feedstock. Member states must cap palm biofuel use at 2019 levels until 2023, before phasing it out by 2030.

Malaysia was planning to bring the issue to the dispute settlement body of the World Trade Organization, Malaysian Reserve wrote.

Malaysia is the world’s second largest producer of palm oil. The country produced over 19.5M tonnes of crude palm oil from a planted area of 5.8M ha in 2018.

The country’s total export of palm oil and palm-based products was 25.2M tonnes, generating export earnings of RM67.5bn (US$16bn).

The EU was Malaysia’s second largest export market for palm oil, out of a total export market of RM80bn (US$19bn). Europe consumed 7.5M tonnes of palm oil a year, about 10% to 15% of global palm oil demand, the Malaysian Reserve wrote.

Malaysia saw a decline in EU palm oil imports between 2017 (1.99M tonnes) and 2018 (1.91M tonnes).

In August, Indonesia – world’s largest palm oil producer – told some retailers in Jakarta to remove food products with “palm oil-free” labels from their shelves after exports of the product had slowed.