03/11/2026 (Daily Express), Kuala Lumpur - A 7.5 per cent State Sales Tax (SST) imposed by the Sabah Government on Crude Palm Oil (CPO), along with higher logistics and transportation costs, are the main factors contributing to the lower prices of Fresh Fruit Bunches (FFB) in Sabah compared with Peninsular Malaysia.

Deputy Plantation and Commodities Minister Datuk Seri Huang Tiong Sii said the two factors were beyond the direct control of market price-setting mechanisms.

He said the Ministry, through the Malaysian Palm Oil Board (MPOB), remained committed to addressing the price differences between Sabah and Peninsular Malaysia.

Huang said this in a written reply to an oral question from Kalabakan Member of Parliament Datuk Andi Muhammad Suryady Bandy in Parliament.

Andi had asked the Ministry to explain the measures taken to address lower FFB prices in Sabah compared with Peninsular Malaysia, despite Sabah recording a relatively high average oil extraction rate (OER) of between 22 and 25 per cent.

Andi also sought clarification on the monitoring mechanisms in place to ensure smallholders received fairer and more transparent prices.

Huang said the Government was committed to continuous monitoring and enforcement through several initiatives to improve price transparency and ensure smallholders received fairer prices.

These included the use of the MPOB FFB Reference Price Formula, which provides a daily price benchmark based on the official formula at an OER of one per cent at the mill gate.

He said the benchmark was available through MPOB’s mobile application and official portal to guide the industry in setting fair prices based on actual fruit quality and OER.

In addition, MPOB requires oil palm fruit dealers and mill operators to clearly display their daily purchase prices based on a one per cent OER at their respective premises.

He said the requirement was enforced under the Malaysian Palm Oil Board (Licensing) Regulations 2005 to improve transparency and prevent price manipulation affecting smallholders.

Huang said the Government also monitored weighing systems through cooperation between MPOB and the Domestic Trade and Cost of Living Ministry (KPDN).

The cooperation aims to ensure all weighing equipment at mills and purchasing centres is verified in accordance with the Weights and Measures Act 1972.

https://www.dailyexpress.com.my/news/290953/why-sabah-oil-palm-smallholders-get-lower-ffb-prices/