In recent months, the industry has made no secret of its attempts to reach and enter a more diverse range of export markets beyond its traditional main destinations China and India, looking to more countries in ASEAN, the Middle East, Africa and more.
According to Malaysian Palm Oil Council (MPOC) Deputy Director of Promotions and Corporate Communications Razita Abdul Razak, Malaysia produces high quality palm oil that is certified sustainable by the Malaysian Sustainable Palm Oil (MSPO) certification scheme, and has hoped to use this as a mark of sustainability assurance when targeting new destinations – but unfortunately so far the results have not been encouraging.
“Currently there is no differentiation of our palm oil from other palm oil, and we realised that we need to adopt a marketing differentiation strategy with strong branding to enhance preference for our product,” Razita told us.
“[To this end] we have made the MSPO certification mandatory for local palm oil since January 2020, [but] in the two years since implementation the visibility of this has not been encouraging, [so it seems] having quality and sustainability alone is not enough.
“[The situation is worrying] as MSPO is what should provide the assurance of sustainability [and gives us a leg to stand on against] deforestation and human rights accusations from countries like the US and EU.
“As such, we want to urge brands [using and selling palm oil] to communicate the sustainability of Malaysian palm oil more directly and assist them to navigate any relevant perception challenges [as well as to enhance] communication with consumers.”
One way the industry hopes to do this is via the development of technological tools, such as the MSPO Trace system which tracks the palm oil certification from plantation down the rest of the supply chain, and the development of an online MSPO certified exporter database to provide extra assurance for foreign importers.
“[Even more importantly is the branding of Malaysian sustainable palm oil], which we hope to do via the MSPO logo, and we are pushing for the usage of the MSPO to be included on all Malaysian certified products,” she added.
“Companies are being incentivised to be part of this branding initiative via grants, and we have also produced multiple forms of multimedia such as infographics and videos to help them promote MSPO via social media platforms.
“The targeted outcome is for global recognition of MSPO as Malaysia’s sustainability standard, for this to be adopted in all product labelling in Asia for a start, and then being able to use MSPO Trace as an indicator of interest and response at a global level as well.”
Targeting Asia first
MPOC is targeting nearby countries in Asia as its initial targets for the promotion of MSPO certification awareness, and has set several very ambitious targets to hit over the coming five years.
“The first target will be nearby South East Asian countries, such as the Philippines where we aim to cultivate MSPO awareness to 70% of the palm oil market and Vietnam where we target 45% of the market,” said Razita.
“In India, one of our largest importers, the government is engaged in technical discussions to reach mutual recognition of MSPO in their palm oil sustainability framework [which will be a great boost for palm oil trade if successful]; whereas in China the focus is on providing assurance of sustainability so we will be emphasising on the development of an MSPO certified exporters database to meet their needs.
“At the end of the day, the plan is to benchmark the success of our promotional and branding efforts based on the number of countries that agree to adopt and recognize MSPO as a credible scheme to import Malaysia’s sustainable palm oil.”