01/01/2013 (The Star) - A strink of significant events marked the local commodities sector last year, notwithstanding a rather dismal price performance.

The year saw commodity writers doing a trapeze act, swinging from issue to issue not just pertaining to palm oil, rubber, steel, timber and tin but also scaling new heights with issues such as the mechanics of oil palm biomass, alternative new energy crops, prospective steel and coal mining, the biodiesel B5-B10 programme, new forms of trade barriers and the anti-dumping act on imported steel, among others.

The palm oil sector, in particular, was rocked by a number of new issues besides the usual suspects like the anti-palm oil campaigns lobbied by Western NGOs and green activists.

The price competitiveness disruption caused by Indonesia's low palm oil export duty regime, the proposed Nutella Tax in France and palm oil labelling in Australia were enough to keep both the government and industry players alike scrambling to find immediate solutions in 2012.

In the case of the two proposals, thanks to the quick action of the government and industry players, both were rejected and failed to take off.

On the domestic front, however, the government took quite some time to find an amicable solution to counter the Indonesian low palm export duty regime much to the discontentment of palm oil refiners before announcing in October that it would lower Malaysia's crude palm oil (CPO) export duty by 4.5% to 8.5%; unchanged since the 1970s and also abolish the duty-free CPO export quota beginning today.

Not to be outdone, the steel sector too encountered its fair share of down moments in 2012, when many local players cried foul over the influx of “cheaper” priced imported steel goods into the country, eroding players' margins and price competitiveness in the process.

This triggered the government to undertake a 360-degree review by hiring a consultancy group, which later proposed several measures to help restore the competitiveness of the local steel sector.

The most interesting development thus far has been the formation of the Malaysia Steel Council headed by International Trade and Industry Minister Datuk Seri Mustapa Mohamed himself to look into reviewing the country's steel policy this year.

Last year also saw mining suddenly becoming a hot topic, in particular when there seemed to be a race among steel players to own steel-mining concession rights from mineral-rich state governments like Terengganu, Kelantan and Pahang.

With Malaysia pegged to own a potential mineral resource worth RM340bil at current prices, many envisage that mining of new mineral resources such as coal, nickel and gold on a large scale can be actively exploited in the near future, given the right incentives and subisidies by the government.

Hence, while some may perceive news on commodities to be rather dry and not as exhilarating as the stock market, it is worth noting that commodity-based export earnings have, in recent years, become a significant contributor to the country's coffers.

The government, in fact, is strategically positioning oil palm and rubber under its Economic Transformation Programme (ETP). By 2020, the palm oil sector is targeted to contribute RM178bil and the agriculture sector RM49bil to Malaysia's gross national income.

The steel sector too, while not being included in the ETP, has grown to become an RM40bil industry that warrants similar attention to other major sectors of the economy.

2012 has been a roller-coaster ride for deputy news editor Hanim Adnan. She wishes everyone a Happy New Year and that may you all be able to stick to your new resolutions.