Malaysia Hopes to Pay for Military Equipment with Palm Oil

Malaysia is in talks with at least six countries on the possibility of using palm oil to pay for arms, as Southeast Asia’s third-biggest economy seeks to replace old equipment to boost defense capabilities, according to Reuters reported in BusinessWorld. 

Malaysia has struggled to update its defense equipment over the years and a cut in its defense budget this year all but derailed efforts to replace navy ships, some of which have been in service for 35 years or more.  Costs have been a big hurdle but using palm oil to help pay for equipment could open new avenues to upgrade,  Defense Minister Mohamad Sabu said earlier this week.  Mr. Mohamad said discussions on paying with palm oil had started with China, Russia, India, Pakistan, Turkey and Iran.  He said he could not put a figure on how much palm oil Malaysia was looking to trade for defense equipment.  Besides new ships, Malaysia was also keen to acquire long-range surveillance aircraft, unmanned aerial vehicles and fast intercept boats

Malaysa and Indonesia, the world’s two largest palm oil producers, are embroiled in a dispute with the European Union over a plan to phase out the commodity from renewable fuels used by the bloc by 2030 over deforestation concerns.  The two countries supply about 85% of global palm oil, much of which is used in food but also in items such as lipstick and soap.