Following the trade war between palm-oil-producer countries, Indonesia and Malaysia, and the European Union, the “trade route” is changing. Accordingly, palm oil trades are now greatly seeing a new opportunity in China.
EU was the biggest palm oil products’ consumers in the last decades. However, the commodity trade is potentially changing as China might step up to become its highest consumers.
According to Reuters, China plans to remove several oil import tariff quota management. The products include soybean, rapeseed, and palm oils.
Regarding the decision, Chinese companies had stopped to purchase US agriculture products. This is due to US President Donald Trump’s recent decision to impose tariffs on another US$ 300 billion of Chinese imports.
Consequentially, this policy has worsen the US-China trade war. In response, China plans to acquire agriculture products from other countries.
In so doing, the progression of this event scaffolds a big opportunity for Indonesia and Malaysia. Both palm-oil-producer countries gain its benefits after suffering a huge blow from the EU.
Also read: Another Trade War Coming Up, Indonesia vs EU
China and Palm Oil
China has always been one of the biggest markets for palm oil products together with India, Indonesia, the EU, and so on.
Palm oil has penetrated in almost every sector in Chinese business. For example, many instant noodles companies in China use palm oil as one of the main ingredients.
Despite resulting in huge controversies, companies and factories have no hesitation in using the aforesaid product.
This is so for so many products containing palm oil are on almost every single supermarkets’ shelf. Compared to Europeans, Chinese companies do not receive many critiques from their people for using palm oil products.
In China, many people currently do not see the use of palm oil in massive products as a problem. However, that does not mean that the situation might not change sooner or later.
