Malaysia’s Revival of China-Backed Mega Rail Project Provides Hopes for More Palm Oil Sales

Malaysia has signed an agreement with China to resume the much-debated East Coast Rail Link (ECRL) project, which will include increased palm oil exports to the latter, said Malaysian Prime Minister Tun Dr. Mahathir Mohamad.  The project had previously been cancelled after Mahathir’s political party Pakatan Harapan came into power last year, citing hefty costs and debts incurred.  Earlier this month, Tun Mahathir announced that the project had been revived at a lower cost of RM44 billion (US$10.6 billion), some RM21.5 billion (US$5.2 billion) less than the original RM65.5 billion (US$15.8 billion), would also include increased palm oil exports to China.  

According to data from the Malaysian Palm Oil Board (MPOB), China is the second-largest importer of Malaysian palm oil worldwide with uptake at 1.9 million tons in 2018 after India which imported 2.5 million ton in the same year.  MPOB expects the country’s palm oil exports this year to rise 4.3 percent to 17.2 million tons from 16.5 million tons last year.