KUALA LUMPUR, Oct 22 (Reuters): Malaysia, the world's second largest producer and exporter of palm oil, warned on Tuesday against new European Union (EU) rules that could hurt demand for a commodity used in foods from snacks to chocolate spread, threatening a $60-billion industry.
Palm oil is used in everything from lipstick to biofuels, but its role as a cheaper cooking medium ensures that food accounts for nearly 70 per cent of global consumption of an edible oil whose cultivation is blamed for stripping tropical rainforest.
The EU is looking at new limits on food contaminants in refined fats and oils, including palm oil, said Teresa Kok, Malaysia's minister in charge of the agricultural mainstay.
"Our industry must be ready to anticipate any challenges to these trade impediments and most importantly address the issues, especially on food safety," Kok told a conference on palm oil supply and demand outlook near the capital, Kula Lumpur.
The EU has imposed a limit for glycidyl esters and will soon impose a limit for 3-MCPD esters "that may have an impact on palm oil consumption in food products", Kok said, referring to the contaminants.
The European Food Safety Authority has said the two contaminants raise potential health concerns. A European Commission working group has also discussed setting maximum levels for 3-MCPD esters in food ingredients.
Environmentalists have attacked palm oil over the vast areas of forest they say have been cleared to grow the commodity that is consumed by billions of people.
Kok reiterated that Indonesia and Malaysia - the top two producers of palm - would challenge at the World Trade Organisation another EU law limiting its use in biofuels.
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