Ezzaruddin Abdul Rapar dedicates much of his time leading visitors through an "experience center" located within a vast oil palm plantation situated just west of Kuala Lumpur, approximately one hour away from the city. This property belongs to the Malaysian corporation known as Sime Darby.
He could highlight that the plant's oil-filled seeds can be utilized to create a reddish jam abundant in Vitamin E.
One of his targets is to win over Chinese consumers. Recently, Malaysian palm oil exports to China have declined, which is a significant worry for a nation where vast expanses ofPeninsular Malaysia are covered with plantations stretching as far as the eye can see.
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Ezzaruddin mentioned that Chinese consumers may be uncertain about how to use palm oil, possibly due to concerns over its health effects, even though it contains Vitamin E. Alternatively, they could favor other oils as their income increases and preferences shift.
Palm oil contains a significant amount of saturated fats, which have long been associated with increased chances of developing heart diseases.
Palm oil is also Malaysia's leading export commodity, having exported 26.7 million tons of palm oil products globally last year.
Ezzaruddin mentioned that in China, they possess their own supply of oil. However, he added that for them, palm oil is quite versatile, allowing them to meet the demand.
"Therefore, many aspects require streamlining as they could be influenced by cultural factors, the utilization of resources like oil, or perhaps the market may still be adapting to these changes," explained Ezzaruddin, who leads the business operations at the Carey Island plantation.
In 2022, China brought in 1.76 million tonnes of Malaysian palm oil, accounting for 11.2 percent of Malaysia’s total export volume of this product. However, these figures dropped to 1.47 million tonnes (9.7 percent) in 2023 and further decreased to 1.39 million tonnes (8.2 percent) the following year, as reported by the Malaysian Palm Oil Board, which is a governmental organization.
Initially the leading buyer of Malaysian palm oil, China has since been superseded by India.
As Chinese consumers gain more financial resources, they are beginning to seek out food products made with oils deemed healthier, noted Khor Yu Ling, a political economist affiliated with Singapore-based Segi Enam Advisors. She further mentioned that much of these healthier oils can be processed within the country itself.
She mentioned that rapeseed oil has become quite prevalent nowadays and can often come from China, whereas a significant portion of the large quantities of soybeans imported into China annually is used for producing oil.
"She mentioned that there’s still a middle-income trap for palm oil due to the belief that it isn’t as healthy." She further noted that specialty, health-oriented palm oil currently falls under the 'niche' category, yet it's gradually becoming the new standard.
Reports suggest that there is an increased demand for value-added products," Khor stated. "Everybody is attempting to manufacture them currently.
Surrounding the experience center’s gift shop and mini-museum are endless rows of short palm trees bearing small fruits similar in size to dates. These fruits house an oil that is exported overseas for culinary uses or food processing purposes.
Sime Darby, operating over 300,000 hectares (741,000 acres) of palm plantations across 13 nations—primarily in Southeast Asia—maintains a trading outpost in China. They are far from being alone as many producers aim to capitalize on the vast opportunities presented by the Chinese market.
Executives across Malaysia’s palm industry are modifying their manufacturing processes and initiating promotional campaigns to win back the Chinese market.
Faisal Iqbal, who serves as the general manager for marketing and market development at the Malaysian Palm Oil Council—a body dedicated to promoting the industry—mentioned that some individuals may still hold onto the outdated belief that palm oil isn’t nutritious. Therefore, they aim to raise awareness about its health advantages.
The situation with palm oil is particularly significant for Malaysia as palm cultivation is decreasing across the country’s population of 34.1 million people. This decline stems from various factors including environmental concerns, urbanization, the necessity for replanting, and increased exports from rival Indonesia, which is a substantially larger producer.
Malaysia bolstered the sector by securing over RM230 million ($51.8 million) in palm oil trade agreements during Deputy Minister Chan Foong Hin’s visit to China in July. The trip aimed at strengthening economic ties between the two nations focused specifically on boosting palm oil exports.
According to Bernama, Malaysia’s national news agency, they incorporated an e-commerce agreement aimed at selling palm oil as health supplements in China. Additionally, another pact was focused on increasing the usage of nutrient-packed red palm oil in Chinese livestock feed.
Another initiative sought to boost Malaysian refinery Able Perfect's Chinese presence in refined palm oil and palm shortening sectors to around RM200 million, according to Bernama quoting the deputy minister.
Khor commented, "This appears to be an improvement over previous MOUs as it clearly focuses on new and value-added products."
Iqbal’s council is engaging in separate discussions with nutrition organizations in the Chinese city of Xiamen, leveraging their individual contacts within these groups, to enhance local understanding regarding the health and nutritional benefits of palm oil. This initiative in Xiamen represents just one among several projects initiated by the council across China.
Iqbal mentioned that China's interior markets, which extend past the comparatively prosperous coastal urban areas, offer yet another fresh sales opportunity.
Iqbal mentioned that certain exporters are promoting red palm oil due to its health advantages. Packed with numerous vitamins, antioxidants, and various nutrients, some individuals consume it daily as they believe in its direct benefits.
He suggested that individuals should indeed aim to have either one teaspoon or one tablespoon daily, simply by consuming it as a liquid.
As an additional benefit for Malaysian exporters in 2023, China approved the usage of tocotrienols, which are vitamin E compounds derived from palm oil. Some exporters are now promoting palm carotenoids, an antioxidant that could potentially be sold as a softgel health supplement.
The health supplement sector in China has experienced rapid growth due to heightened health consciousness following the onset of the COVID-19 pandemic, as stated by the consultancy firm Dezan Shira & Associates in their recent report. According to data from iiMedia Research, this industry—which was valued at $45.5 billion in 2023—is anticipated to expand to $58.2 billion by 2027.
Iqbal mentioned that we can anticipate further experiments in the future.
You can customize palm oil in numerous ways, really," he stated. "There are plenty of formulas tailored to benefit users, and these big companies have the capability to achieve this.
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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.
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