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MARKET ALERT Palm Oil Industry is Highly Potential in China China's economy are expected to grow over the

next 20 years at a rate that will make it larger than the U.S. economy at the end of that period. China is one of the world’s biggest cooking oil consumer and it means, palm oil imports by China wil be high every years. As we know, Malaysia is the world’s second-largest palm oil producer after Indonesia. Clearing and burning of rainforests for palm oil plantations is one of the primary drivers of deforestation in Southeast Asia, and is one of the major reasons Indonesia is the world’s third largest global warming polluter, just behind China and the United States. At the same time, the Malaysian government is writing a new global standard for its palm oil to ensure quality and address concerns of nongovernmental organizations. On January 14, 2013 Bloomberg News mentioned that China generally trying to improve their food safety, not just focused on the palm oil industry and it is not been clarify yet. Imports from China is around 300,000 metric tons in that month, less than half of those in December last year 2012, according to the median of estimates from six traders and researchers compiled by Bloomberg. Its mean that palm oil industry of Malaysia had been dropped at the early year of 2013. But on October 2013, Malaysia try to increase their palm oil industry besides try to improve the export of palm oil to China. According to Business News, December 10, 2013, exports of palm oil and related products to China in the first 10 months of this year rose 16.5% to 3.9 million tonnes versus 2012, according to Malaysian Palm Oil Board (MPOB). The shipments were valued at RM9.02bil, down from RM10.26bil due to lower crude palm oil (CPO) prices. Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas said at a Palm Oil Health and Nutrition seminar that China was Malaysia’s biggest export destination for palm oil and related products. He also mentioned that Malaysia have noticed an increase in exports with this tax structure because Malaysia now is more

competitive with Indonesia in term of palm oil industry. Douglas also said that the government is in the final stages of drawing up the Malaysian Sustainable Palm Oil (MSPO) certification to improve standards and the image of locally produced palm oil products. Malaysian Palm Oil Board (MPOB) director general Datuk Dr Choo Yuen May said that the Board established its first overseas research and development centre in China in 2005, an initiative that reflected the importance of the Chinese market to Malaysia’s palm oil. Douglas said he was optimistic that demand for palm oil and related products in China would increase next year.