PLANTATIONS, Industries and Commodities Minister Datuk Hajah Zuraida Kamaruddin has expressed her confidence that the favourable global prices of commodities and robust growth in the sector will help expedite the National Recovery Plan (NRP).
This is in response to recent news reports that palm oil export revenue for 2022 is expected to grow by 11.8% to RM72.25 bil from RM64.62 bil recorded in 2021.
Meanwhile, export of timber and timber products is expected to be RM24 bil or an increase of 5.52% compared with 2021 (RM22.74 bil in value).
“Plantation owners from listed conglomerates to smallholders as well as other industry players all stand to gain from the increased revenue,” Zuraida said in a statement.
“This ‘windfall’ will translate into higher profitability and lead to the Government increasing its tax revenue which will then allow the Government to carry out more socio-economic projects in the spirit of ‘Keluarga Malaysia’.”
According to Zuraida, based on the projected average crude palm oil (CPO) price for 2022 of RM4,250 per tonne as well as the projected CPO production for 2022 of 19 million tonnes, it is estimated that the total collection of windfall profit tax levy (WPL) in 2022 would exceed RM1 bil.
The palm oil industry is also estimated to generate another RM2 bil worth of tax revenue from export tax in 2022.
“This development is timely considering that the Government has spent billions of ringgit over the past two years to help tide over Malaysians impacted by the twin crises of the COVID-19 pandemic as well as the resulting economic slump,” she remarked.
“The Ministry of Plantation Industries and Commodities (MPIC) is glad that it can complement the Government’s efforts to replenish its coffers. On its part, the MPIC will step up efforts to help industry players under its purview seize this economic opportunity including opening up more markets for our commodities.
“Over the past two months, I have led extensive trade missions abroad to open up markets for our commodities. Countries like Iran, Turkey, India and China have since expressed their interest to beef up imports of our commodities.
“Some countries have already increased their purchase of these products, while others are in the midst of finalising the trade deals.”
Elaborating, Zuraida said that China is expected to import an additional 500,000 tonnes of palm oil from Malaysia in 2022 while India is expected to be the country’s top market destination for Malaysian palm oil with an additional import of two million tonnes this year.
Reports recently indicated that India is expected to face edible oil shortages due to its reliance on sunflower oil from Ukraine as well as the changes to Indonesia’s oil palm export policy.
It is expected that Malaysia’s palm oil will help fill this vacuum in India.
“The MPIC will also assist industry players especially smallholders to make their businesses more sustainable in the future. This includes efforts to automate their businesses, enhance information technology adoption and reduce foreign labour dependency,” she said.
“This is possible with the proper reinvestment strategy made viable with their increased turnover.”
For example, the smallholder replanting easy financing scheme aims to provide easy financing to smallholders to replant unproductive oil palm which offers a low interest rate of 2% and a moratorium period of 48 months.
There is also the easy financing scheme for agricultural inputs for oil palm smallholders with a profit rate as low as 2% which aims to help smallholders purchase agricultural inputs such as fertilisers and weed and pest control materials. – March 18, 2022
