Russia Could Swap Weapons for Malaysian Palm Oil

Russia’s top defence procurement official has said his country could drastically increase its supply of palm oil from Malaysia, and the move will entail an offset deal leading to the Royal Malaysian Air Force (RMAF) disposing of its two squadrons of 18 decommissioned Russian MiG-29N jets, Izvestya reported.

The international cooperation and regional policy director of state-owned corporation Rostec, Viktor Kladov, told Malaysian media that Russia was willing to buy Malaysian palm oil in substantial amounts to improve the bilateral trade balance, with the possibility of trade-offs for arms and defence procurement and transfer of technology and job spin-offs.

He added that Russia is already assisting in refurbishing the ageing fleet of 18 Sukhoi Su-30MKM, via its local partner ATSC Corp, reportedly for $540 million — thus expanding its serviceability for another 15 years.

“We are aware of the palm oil ban for biofuels in Europe and Russia is ever-ready to help Malaysia by buying more palm oil. At present, 90 per cent of Russia’s palm oil is imported from Indonesia and we intend to change that in Malaysia’s favour,” Kladov said.

“I have personally spoken with Prime Minister Mahathir Bin Mohamad on this matter at a private meeting with him yesterday, and applauded him for his great vision. This can lead to improved defence offset packages that can greatly benefit Malaysia,” he said in a special interview at the Langkawi International Maritime and Aerospace exhibition (LIMA) 2019 in Padang Matsirat.

Kladov was a prime mover in enhancing Russia-Malaysia defence relations during Mahathir Bin Mohamad’s first 22-year tenure as Prime Minister. It culminated with a several hundred million dollar offset deal, involving palm oil, with Malaysia initially procuring 18 MiG-29N Fulcrum air superiority fighters in 1995.