SINGAPORE (Jan 29): A couple of negative developments since the start of the year have kept a lid on crude palm oil (CPO) prices. On Jan 19, the European Parliament voted to ban subsidies for palm oil as ­biofuel in cars. The Indian government may raise import duties on certain palm oil products.

The European Union (EU) legislation, if finalised, is set to take effect in 2020. Some market watchers believe there is still scope to overturn the vote. According to palm oil naysayers, biodiesel is 80% worse for climate change than fossil fuels.

Malaysia has fought back. On Jan 23, the Malaysian Palm Oil Council said the EU’s Renewable Energy Directive of excluding palm oil-based biofuels is a potential violation of the World Trade Organization’s rules. Malaysia’s Minister of International Trade and Industry Mustapa Mohamed said: “The EU’s latest move is… a potential violation of the WTO rules as it is a deliberate attempt to block palm oil access into their market.” The Malaysian government is planning to collaborate with other palm oil-producing countries such as Indonesia to voice their concern on this issue, the minister said.

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