KUALA LUMPUR (Feb 19): The Malaysian government said it was concerned about France's proposal to raise palm oil tax, and that talks would continue with French stakeholders on the matter.

In a statement today, Malaysia's Ministry of Plantation Industries and Commodities said French policy makers plan to raise the domestic tax on palm oil and palm kernel oil to €300 a tonne next year (2017) before upping it further to €900 by 2020.

"The amendments were premised on the allegation that the palm oil industry contributes to deforestation and the disappearance of the eco systems, as well as health effects of palm oil consumption.

"Malaysia being a major producer and exporter globally of palm oil products would like to reiterate that the palm oil industry in Malaysia subscribes to sustainable practices, including good agricultural practices and palm oil is a nutritional oil," the ministry said.

The ministry's statement followed a meeting between Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas and Ambassador of France to Malaysia Christophe Penot in Putrajaya today.

According to the ministry, France's new tax structure on palm oil had a negative impact on imports of the commodity there. The ministry said the tax rise would also affect Malaysia–France trade relations.

"The Ministry of Plantation Industries and Commodities will continue to engage the relevant stakeholders in France. These include representation by the Malaysian Embassy in Paris to the relevant stakeholders in France on the concerns with regards to the amendments to the Law on biodiversity and reiterate the positive and evidence based of the palm oil industry.

"In addition, Malaysia will also collaborate with Indonesia, the other major producer of palm oil, to jointly represent the case highlighting the environmental and sustainable development of the oil palm industry, contribution to the economy and poverty eradication, as well as nutritional attributes of palm oil," the ministry said.