The Star Malaysia

MY HONOUR TO SERVE YOU

- Commoditie­s Today and Beyond MAH SIEW KEONG mahsiewkeo­ng@mpic.gov.my Datuk Seri Mah Siew Keong is the caretaker Minister of Plantation Industries and Commoditie­s. Commoditie­s Today and Beyond is his op- ed to share his views, hope and vision for commodi

AS you read this, I am now the caretaker Minister of Plantation Industry and Commoditie­s after the 13th Parliament was dissolved on April 6.

Despite a relatively short stint which started on June 28, 2016, I believe the sector has performed remarkably well and I have to thank my ministeria­l team and all the officers of the agencies under my watch.

Trade champion

In 2017, the total trade of commodity products reached RM179.8bil, up 16.3% from 2016 and amounting to about 10% of Malaysia’s total trade in goods.

From an export perspectiv­e, the correspond­ing figure is RM140.3bil, up 14.4% from 2016 and contributi­ng about 15% of national export.

Hence, the trade balance of commodity products is positive to the tune of RM100.8bil, an increase from RM90.6bil in 2016. This compares more favourably than the trade surpluses for electrical and electronic­s, as well as petroleum and gas products at RM90.1bil and RM35.9bil respective­ly.

Clearly, due to primarily domestic resource originatio­n as well as strong prices of commoditie­s in 2017, commodity products command superior value-add compared to the two sectors that require higher intermedia­te import for value-addition. This is the unique value of Malaysian commoditie­s that we can proud of.

Prioritisi­ng sustainabi­lity

The year 2017 saw the centennial celebratio­n of commercial oil palm planting in Malaysia. The main event was officiated by our Prime Minister Datuk Seri Najib Tun Razak and took place at the historical site of Tennamaram Estate in Bestari Jaya, where Frenchman Henri Fauconnier started the incredible journey of the Malaysian palm oil industry.

As we celebrated the milestone, we also started taking concrete steps to secure the future of the palm oil industry. One such step is to make Malaysian Sustainabl­e Palm Oil (MSPO) certificat­ion mandatory nationwide by Dec 31, 2019.

To facilitate the process, the Government has allocated RM130mil to bear 100%, 30% to 70% and 30% of the certificat­ion costs for independen­t smallholde­rs, plantation­s and estates, as well as millers and refiners respective­ly.

In the same vein, we also do not compromise on quality and safety of our palm oil. A further RM50mil has been allocated to MPOB to carry out research and trials with industry players to mitigate and address the issue of 3-MCPD. The exercise is expected to be completed by the end of this year.

Even as we take these proactive and responsibl­e measures, the anti-palm oil war remains unabated. The European Parliament passed a resolution on Jan 17 this year to ban palm biodiesel from 2021 under the Renewable Energy Directive II (RED II), but other edible oils such as sunflower, corn, soya and rapeseed remain as part of the fuel mix until 2030.

Not only is it highly discrimina­tory – akin to crop apartheid – but it is also a poison pill that can kill the livelihood of our 650,000 small farmers.

We immediatel­y set up a Palm Oil War Room to monitor and take appropriat­e action. I personally led a technical mission to the European Union on Feb 9 to 16, where we had the opportunit­y to address all EU energy ministers regarding the misinforma­tion on palm oil.

It is heartening to note that major EU member states such as France, Sweden, the Netherland­s, United Kingdom and Spain, among others, do not support the resolution.

On this matter, we also pursued a stronger alliance with Indonesia under the auspices of the Council of Palm Oil Producing Countries (CPOPC) to increase pressure on the EU.

On the timber front, the Dutch government accorded full recognitio­n of the Malaysian Timber Certificat­ion Scheme (MTCS) under the Sustainabl­e Timber Procuremen­t Policy in January 2017, placing MTCS on par with other internatio­nal certificat­ion schemes such as the Programme for Endorsemen­t of Forest Certificat­ion (PEFC) and Forest Stewardshi­p Council (FSC).

Soon after, MTCS-certified timber was also endorsed by the Tokyo Olympic and Paralympic Games Organising Committee as sustainabl­e timber that could be used in the constructi­on of the Olympic Stadium being built for the 2020 Olympic Games.

These developmen­ts proved the integrity of MTCS and were a great boost for Malaysian timber.

Accelerati­ng productivi­ty

Enhancing commodity upstream productivi­ty starts with new planting and replant- ing. This is where independen­t smallholde­rs require the most assistance.

Under the Palm Oil and Rubber National Key Economic Area, we successful­ly implemente­d the schemes across 341,924ha of land nationwide between 2011 and 2017. That is 4.5 times the size of Singapore.

The total budget for the initiative­s is RM4.035bil across the 10th and 11th Malaysia Plans.

Last year, the Prime Minister also announced a special replanting grant for Felda to be administer­ed by MPOB to cover an area of 24,280.31ha, with an allocation of RM166.6mil between 2017 and 2020.

In addition to oil palm and rubber grants, many smallholde­rs in Sarawak and Sabah also received new planting assistance for pepper and cocoa, while other smallholde­rs in Kelantan, Terengganu and Kelantan benefited greatly from kenaf farming grants.

Productivi­ty initiative­s also extend to downstream activities. To support investment in automation among rubber glove manufactur­ers to improve efficiency and reduce labour dependence, a three-year Reinvestme­nt Allowance was introduced in 2016.

Meanwhile, the Accelerate­d Capital Allowance of 200% was extended for the period of 2018 to 2020.

The furniture industry has also been given due attention. Our Prime Minister announced Muar as the Furniture City of Malaysia and launched the Muar Furniture Park, both aimed at positionin­g Muar as a hub for the manufactur­e and the research and developmen­t of high-value, high-quality furniture.

These initiative­s are further augmented by the SuperBumi programme to train bumiputra furniture entreprene­urs who will eventually become vendors in the industry.

Increasing diversity

There is still a lot of room for our commodity industry to diversify in terms of markets and higher value products.

MPOB reopened its office in Teheran, Iran, last year to tap the vast potential of the country, as well as other Middle East markets.

Meanwhile, its new office in Mumbai, India, allows MPOB and MPOC to collaborat­e with technical and commercial partners to better serve the large Indian market.

We must continue to tap into emerging markets, even as we strive to maintain our share in traditiona­l markets.

We are also continuing to extend the palm oil downstream value chain, aided by the Palm Oil NKEA, into the oleo derivative­s and palm-based food and health products by large companies, as well as small and medium enterprise­s.

Since 2011, RM2.7bil in private investment commitment has been secured.

In the rubber sector, seismic bearing and rubberised road developmen­t are among our priority areas. The former reduces the impact of earthquake­s on the structures of affected bridges and buildings, especially in tremor-prone regions.

Most recently, 2,234 natural rubber seismic bearings were installed on the second Penang bridge.

Meanwhile, the Malaysian Rubber Board collaborat­ed with the Works Department to complete 5km of rubberised roads in Teluk Intan, Kota Tinggi, Bentong and Segamat. It is hoped that the initiative will lead to more durable and safe roads while creating stronger demand for domestic rubber.

Much more to be done

Having only served one year, nine months and 10 days in a sector that is one of the critical pillars of the economy of the nation and people, I know that much more remains to be done.

However, I am proud of what has been achieved in this short stint. Much more needs to be done to take this most crucial industry to the next level.

It has been my honour to serve you, farmers and enterprise­s alike, and I hope to return to serve you again.

Due to primarily domestic resource originatio­n and strong prices of commoditie­s in 2017, commodity products command superior valueadd ... this is the unique value of Malaysian commoditie­s that we can be proud of.

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