Friday, December 19, 2008

Sarawak Oil Palm Planters Seek Respite from Government

If yesterday, we heard about problems faced by seafood exporters (see yesterday blog), today in the StarBiz (Friday, 19 December 08)I read about Sarawak oil palm planters problem. They are badly hit by the fall in crude palm oil (CPO) prices, and want the Government to give them some breathing space by waiving the windfall profit tax, lowering the cess and sales taxes, and regulating high fertiliser prices.

Sarawak oil palm planters also proposed that the unused portion of the cess collected for the Cooking Oil Subsidy Scheme by the Malaysian Palm Oil Board (MPOB) be refunded directly to Sarawak plantation companies.

A waiver is also proposed for Sarawak plantation companies which are still paying their outstanding cess instalments. It is understood that Sarawak Oil Palm Plantation Owners Association has got an assurance from the Minister of Primary Industries and Commodities that the proposals would be studied by the ministry concern.

The association said that the minister had given an indication that Sarawak planters would be allowed to export their CPO tax-free, given the high national CPO stockpile.

Sarawak Oil Palm Plantation Owners will form a consortium to jointly set up own refineries if the existing four refiners in Sarawak refuse to abolish the RM40 per tonne discount on the association CPO price.

Sarawak Plantation managing director suggested that the government should use the MPOB cess on R & D to assist Sarawak planters in sustainable management of peat areas as well as cultivating more efficient agriculture practices.

For information, the Sarawak oil palm industry is still at an infancy stage with about 20% of matured oil palm areas and low yields.

It is understood that with the CPO price currently at RM1,500 per tonne, many Sarawak planters were incurring losses and cash flow squeeze, given the high cost of production at RM1,800 to RM2,000 per tonne. Planters in the Semenanjung have a cost of production of about RM1,100 to RM1,200 per tonne.

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