Doppa calls for transparency in FFB pricing

Sarawak Dayak Oil Palm Planters Association (Doppa) is calling on the Malaysian Palm Oil Board (MPOB) to review the implementation process of the fair price mechanism for fresh fruit bunches (FFB).

This is to curb any price manipulation or malpractices by dealers or processing entities, said its president Napoleon R. Ningkos in a statement yesterday.

He added the association wants a transparent mechanism to show the standard calculation method used to obtain the price of one ton of FFB, for the knowledge of palm fruit sellers, especially independent smallholders.

In a recent meeting, he said association members had voiced their concerns over the matter and wanted answers regarding disparity in prices offered by various collection centres and differences in type and amount of deductions by various palm oil mills.

According to the MPOB website on March 7, 2024, the price of crude palm oil (CPO) was RM4,093 per ton and the price of one ton of FFB was RM700 to RM720 per ton but Doppa learnt that there was a huge disparity of RM60 to RM90 per ton of FFB within neighbouring areas, offered by different FFB dealers

“Doppa found that the price differences between the palm oil mill and FFB dealers are very high which offer between RM550 and RM700 per ton based on fruit grades,” he said.

The association said while it is aware that the price differences are caused by cost of processing, transportation and quality of palm fruit, there were also cases of FFB dealers offering prices higher than the receiving mill.

Mills apply a variety of charges and rates for different things like cost, insurance and freight (CIF), transport costs, refinery charges and processing fees including refinery discounts on top of the MPOB Cess and government SST, it added.

Doppa wants information on oil extraction rate (OER), transportation cost and processing cost to be displayed weekly for the knowledge of smallholder FFB sellers who receive immediate cash payments or monthly payments.

It said this is to comply with MSPO 2530-4-1:2022 (Palm Oil Mill) and MSPO 2530-4-3:2022 (FFB Dealers) which require that a mechanism should be established transparently for a fair pricing method and displayed to all FFB sellers.

A transparent calculation method for determining the price of a ton of FFB will enable independent smallholders and even other palm fruit sellers to decide on where to sell their fruits after obtaining information on the displayed calculation method, it explained.