Soppoa: Increase in cess payment further burdens hard-hit palm oil industry

KUCHING: Sarawak Oil Palm Plantation Owners Association (Soppoa) expressed its disappointment over the recently-gazetted Malaysian Palm Oil Board (Cess) (Amendment) (No 2) Order 2021, which came into effect yesterday.

In a statement, Soppoa said the gazette resulted in a 14.3-per cent increase in cess payment, from RM14 to RM16 – causing further hardship to the palm oil industry in Sarawak during the economic downturn and Covid19 pandemic.

“Low yields, low OER (oil extraction rate), high production cost and severe shortage of harvesters have retarded the growth and development of the industry here.

“Foremost, the palm oil industry was not consulted on the additional cess increase, which would only add to the cost of production,” it said.

Soppoa said industry players had expressed surprise and regret over the decision by the Ministry of Plantation Industries and Commodities to impose the additional cess.

In view of the low productivity of oil palms in Sarawak, Soppoa proposed that the Malaysian Palm Oil Board (MPOB)’s cess collected from Sarawak be channelled back to the state for oil palm research and development for upstream and downstream, for research institutions like Sarawak Tropical Peat Research Institute (Tropi), as well as for local and foreign universities in Sarawak.

“Sarawak’s palm oil yields are low compared to those in Peninsular Malaysia and Sabah, and so it is only right that more funds be allocated by MPOB to conduct research and development in Sarawak to increase yields and resolve planters’ issues.

“The unique conditions of peat soil, high rainfall and P&D (pests and diseases) problems in Sarawak contribute to the low yield – more research and technology development are requird to increase the productivity to levels to sustain the sector business.”

Soppoa said it was timely for the government to consider its proposal – for the cess collected from Sarawak to be channelled back to the state for immediate use to grow the palm oil industry in Sarawak.

It said this would resolve various issues to cushion further deterioration of the low yield and low OER, key factors in crude palm oil production in the state.

“Sarawak is the largest single planted area in Malaysia.

“The onus falls upon the government to allocate sufficient funds from MPOB cess collected from the plantation sector in Sarawak for R&D (research and development) activities meant to increase yields, sustain and produce good quality (palm oil) for export purposes, and also to increase the number of expertise and scientists in Sarawak for such activities,” it added.