Sabah palm oil smallholders plead for relief

KOTA KINABALU: The current slump in palm oil futures with prices hovering at around RM2,160 per ton is hitting producers, especially smallholders, badly.

Reports from Sabah’s east coast, a major palm oil producing region, say that some mills and refineries are focused on clearing stockpiles of large companies before they will buy from smallholders, even at below production and delivery cost.

“I was made to understand that limited capacity is one reason for this,” said Datuk Johnny Mositun, a former State Assembly Deputy Speaker and Parti Bersatu Sabah (PBS) Pantai Manis Division chief.

“What concerns me is the plight of smallholders, some 200,000 of them in Sabah. Lately, we’ve been hearing that in the east coast districts many are offering to sell at a loss, RM169 per ton for FFB, but even then there are few buyers. It’s a desperate situation for them,” the PBS vice president said.

Mositun said, the multinationals and plantations had the resources to ride out the palm oil slump but not the smallholders.

“They are in need of urgent support and assistance. At least for now, the government should come up with a ‘contingency relief plan’ for the smallholders. Examine all other possibilities, including a minimum price for smallholders, a monthly ‘cash allowance’ akin to the fishermen’s assistance scheme,etc.. Don’t just wait till they go bankrupt,” Mositun suggested.

Calling on Putrajaya and the Palm Oil Industry Board to show urgency, Mositun said, Malaysia should do more to fend off competition from Indonesia on a sustained basis instead of ad-hoc reactions.

“Indonesian competition is a long term reality. We should not forget the lessons of the era of natural rubber. The same thing is happening with the palm oil industry. A comprehensive policy, holistic approach and sustained action plan is called for,” Mositun said.

Mositun said, consumption could be stepped up if the government adopted the higher biodiesel rating which Indonesia had already legislated.

“In Malaysia, our rating is 5 per cent palm oil in diesel whereas Indonesian has legislated 30 per cent. We must step up usage of palm oil in the non-food sectors,” Mositun said.

He suggested that a sustained dialogue with China and India, the biggest buyers of Malaysian palm oil, could possibly persuade these two countries to increase their imports from Malaysia.

“I also think the government should look for new markets for Malaysian palm oil in South and Central America, the Arab countries and even Russia and Eastern Europe,” he said. — Bernama