KUALA LUMPUR: Malaysia must be one step ahead in planning ways to react to the price volatility in the palm oil market to protect the country’s source of income, as well as the wellbeing of smallholders.
Council of Eminent Persons chairman Tun Daim Zainuddin said since Malaysia was a small country and 80 per cent of its crude palm oil (CPO) and palm oil-based products were exported, it was vital for the country to team up with Indonesia, the world’s largest producer of the commodity, especially in tackling the challenges from the European Union and the United States-China trade dispute.
“We must work with Indonesia because Malaysia is a small nation (with 31 million people as at 2017) and together with Indonesia, home to 264 million people, we can fight the battle together,” he said.
“This is normal even during my time. So it’s not something new, but now, with the ongoing threats coming from the EU and the US-China trade dispute, we need to be smart.”
Daim said while it was good news that the US and China were about to wrap up their trade talks, the government, its agencies and industry players must also be alert to what had transpired during the talks.
In March last year, US President Donald Trump imposed tariffs of up to 25 per cent on Chinese imported goods, and the Chinese government had retaliated by imposing tariffs of 25 per cent on US$110 billion (RM454.6 billion) worth of US goods, including soybean, which is the US’s most important agricultural export crop.
This has opened up more opportunities to other edible oils, including palm oil.
“But don’t react when it’s too late, because it might affect our market and the smallholders,” he said.
China is the third largest buyer of Malaysian CPO after India and the EU.
But, following the signing of the new deal on the East Coast Rail Link project on Monday, Prime Minister Tun Dr Mahathir Mohamad said Putrajaya would take advantage of the agreement and work out the purchase of palm oil from China.
Daim also urged youths to venture into modern agriculture using the latest technology.
“I went to Sabah recently where I’d visited one entrepreneur’s farm. He has about 5,000 cows, fish ponds, as well as pineapple and durian plantations. I asked him how much revenue he earned. He did not answer, but I’m assuming he must be earning about RM500 million yearly.
“I believe we can also do that here, but the most important thing is that we need to ensure that we produce good quality products.
“We also need full commitment from the government on modern farming,” he said. - Bernama