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Supply Chain

EU Risks 'Trade War' With Malaysia Over Palm Oil

The European Union risks opening up a trade war with Malaysia over its "grossly unfair" policies aimed at reducing the use of palm oil, Prime Minister Mahathir Mohamad said on Thursday.

This month, the European Commission concluded that palm oil cultivation results in excessive deforestation and its use in transport fuel should be phased out by 2030.

Malaysia, the world's second biggest palm oil producer after Indonesia, relies on the crop for billions of dollars in foreign exchange earnings and hundreds of thousands of jobs.

Protectionism

Mahathir, 93, said the EU's increasingly hostile attitude towards palm oil, a commodity used in everything from chocolate spread to lipstick, was an attempt to protect alternatives that Europe produced itself, like rape seed oil.

"To do that kind of thing to win a trade war is unfair," Mahathir told Reuters in Langkawi, a tropical island 30 km off Malaysia's mainland.

"Trade wars are not something we like to promote but on the other hand it is grossly unfair for rich people to try and impoverish poor people."

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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