Malaysia defends palm oil industry in U.S. food labeling war

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Malaysia and the palm oil labeling war

Highlights

Malaysian palm oil exports to the U.S. fell from 288,000 tonnes in 1986 to 142,000 tonnes in 1988 amid labeling campaigns and pressure from the soybean lobby.
Malaysia launched a coordinated response through scientific initiatives, seminars in six U.S. cities in October 1987 and industry coordination to restore palm oil’s reputation.
The August 1988 truce between the Malaysian Oil Palm Growers Council and the American Soybean Association failed to end individual campaigns or resolve the debate over diet and health.

This article was translated from the original. Read the original version by our correspondent here.

Labeling campaign reshapes competition on supermarket shelves

The Edge Malaysia reports that this piece looks back at how the dispute between palm oil and the American soybean lobby grew from a food-labeling issue into a market battle that affected Malaysian trade.

In the late 1980s, the American Soybean Association (ASA) launched a campaign highlighting what it called “tropical fats” and their saturated fat content. According to the ASA’s own campaign records, the “Tropical Facts” effort aimed to remove tropical oils from food service and food processing in America, underscoring the intersection of health arguments and commercial interests.

During the same period, Omaha businessman Phil Sokolof pressured food companies to remove palm and coconut oils, as well as lard and beef tallow, from their product formulations. In 1988, he sent about 11,000 letters to food industry executives and later bought a full-page ad titled “The Poisoning of America!”, naming consumer products and urging the public to avoid foods containing palm or coconut oil.

For food producers, the pressure did not necessarily come from scientific journals, but rather from concerns about consumer perceptions on supermarket shelves. The article argues that consumers have a reasonable right to know what their food contains, but the central question is when labels are used to imply overly broad nutritional conclusions about oils with different fatty acid profiles.

Malaysian Palm Oil Board (MPOB) data cited in the article show that Malaysian palm oil exports to the U.S. fell to about 288,000 tonnes in 1986, 185,000 tonnes in 1987 and 142,000 tonnes in 1988. While these figures do not prove that a single campaign was responsible, the decline highlights the reputational and market risks that arise when health claims begin influencing food manufacturers’ choice of ingredients.

Malaysia’s response combined science, leadership and industry resources

The article says Malaysia needed political leadership, scientific credibility and industry support to defend palm oil, with Tun Dr Lim Keng Yaik, Tan Sri Dr Augustine Ong and the late Tan Sri Børge Bek-Nielsen playing important roles.

Augustine Ong, then director-general of the Palm Oil Research Institute of Malaysia (Porim), led the scientific response. According to historical records from the Malaysian Oil Scientists’ and Technologists’ Association (Mosta), he brought together American and European scientists for a month-long seminar program across six U.S. cities in October 1987, while expanding nutrition research and cooperation with researchers in Europe, the U.S., Australia and Asia.

Bek-Nielsen helped organize industry resources and coordinate the response. Corporate biographical records cited in the article state that he was appointed chairman of the Palm Oil Promotion Fund Committee in July 1988 to coordinate countermeasures against the ASA campaign. He also joined the Malaysian delegation to the U.S. in October 1987 and again in late February and early March 1989.

Lim used technical arguments about partially hydrogenated oils to challenge palm oil substitutes, including through his famous phrase, “hydrogen bomb.” The article explains that some liquid oils, including soybean oil, can be partially hydrogenated to make them more solid for use in processed foods—a process later identified by the U.S. Food and Drug Administration as a major historical source of artificial trans fat in processed foods.

However, the article stresses that regular soybean oil is not the same as partially hydrogenated soybean oil, and that the scientific debate did not end with a single phrase or negotiation. It refers to a meeting between ASA leaders and Malaysian oil representatives in Honolulu in August 1988, followed by a Reuters report in August 1989 that the Malaysian Oil Palm Growers Council and the ASA had agreed to stop portraying each other’s oils negatively.

According to the article, the truce did not end Phil Sokolof’s separate campaign, nor did it fully resolve the broader debate in America over diet and heart disease. Its main conclusion is that the palm oil industry learned that defending its markets requires ongoing research, persuasive communication and the development of a value chain capable of withstanding scrutiny of nutrition, environmental, labor and supply reliability issues.

In our earlier article on Malaysia’s crude palm oil reference price cut for November, we explained how the level of RM4,323.78 per tonne kept the export duty at its maximum rate of 10% because it was above the RM4,050 threshold. We also outlined the implications for monthly export costs and competitiveness, as changes in the reference price and tax structure can affect trade flows for the country’s key commodity.

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