What is the core difference between the new and old palm oil MoUs with China?

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The new palm oil Memorandum of Understanding with China significantly expands import commitments compared to the previous agreement.

The recently signed Memorandum of Understanding (MoU) on April 25, 2019, establishes a firm commitment from China to import an additional 1.9 million tonnes of Malaysian palm oil over a five-year period, valued at RM4.56 billion. This stands in contrast to the earlier MoU, dated November 23, 2015, which focused solely on cooperation regarding the quality and safety of palm oil exports and did not include any guaranteed increase in import volumes.
New MoU Guarantees Substantial Import Increase

The primary distinction of the April 2019 MoU lies in its concrete commitment to a significant increase in palm oil imports. China has agreed to purchase an aggregate of 1.9 million tonnes of Malaysian palm oil between 2019 and 2023. This agreement facilitates direct purchases between Chinese government-linked entities and Malaysian palm oil exporters, aiming to bolster trade relations in the agricommodity sector.
Old MoU Focused Solely on Quality and Safety Cooperation

In contrast, the MoU executed in November 2015 was limited to fostering cooperation between Malaysia and China concerning the quality and safety standards of palm oil entering the Chinese market. The Ministry of Primary Industries clarified that this earlier agreement was designed to facilitate existing trade but did not contain any specific commitments or guarantees for an increased volume of imports from China.
New Agreement Opens Additional Investment Avenues

Beyond the increased import volumes, the new MoU also signifies expanded opportunities for bilateral investment. It opens avenues for Malaysia to invest in jet biofuel plants, with an estimated value of RM2.06 billion (US$500 million), and in unsaturated fats, representing an investment of RM206 million (US$50 million). These provisions highlight a broader scope of economic collaboration beyond just the direct trade of palm oil.

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What is the core difference between the new and old palm oil MoUs with China?

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