Investors need to set sights on commodity downstream sector

KUALA LUMPUR: The government has asked investors to set their sights on the downstream sector of the plantation commodity industry to help increase the prices of the commodities.

Primary Industries Minister Teresa Kok Suh Sim said by getting the local industry players into the scene, it could help increase the prices of the raw materials.

“Currently, the commodity prices rely on the international market forces. That is why our commodity prices are low right now,” she said to Bernama in an interview yesterday.

As at yesterday, the Malaysian Rubber Board’s official physical price for tyre-grade SMR 20 was at 529.0 sen a kg, while latex-in-bulk was at 405.50 sen per kg.

The unofficial closing price for tyre-grade SMR 20 was at 531.50 sen a kg, while latex-in-bulk added 2.5 sen to 406.0 sen per kg.

As for palm oil, the prices ranged between RM2,187 and RM2,218 per tonne.

On the palm oil and rubber price difference between Peninsular and East Malaysia, she said it was due higher costs incurred by planters in Sabah and Sarawak.

“Among the reasons are the tax imposed by the authorities, as well as high cost of transportation from farms to factories,” she said.

As for the minimum wage implementation, Kok also said it is a national policy which needs multiple consultations with various parties. “Right now industry players are paying more than RM1,500 per foreign worker, including levy,” she said.

Sime Darby Plantation Bhd recently commented that the proposed increase of minimum wage to RM1,500 per month would cause financial consequences to the plantation industry.

Executive deputy chairman and managing director Tan Sri Mohd Bakke Salleh said if the proposal were to be implemented, it would raise labour cost’s contribution to total production cost to 35 per cent from 26 per cent.

Currently, the commodity prices rely on the international market forces. That is why our commodity prices are low right now. Teresa Kok, Primary Industries Minister