MARKET DEVELOPMENT
REPORT: Value-Added Of The Agriculture Sector To Decline
REPORT: Value-Added Of The Agriculture Sector To Decline
24/10/2016 (Bernama) - The value-added of Malaysia's agriculture sector is envisaged to decline to 3.3 per cent this year versus 1.2 per cent in 2015 mainly weighed down by lower crude palm oil (CPO) production.
In the first half of 2016 (1H16), the sector contracted six per cent due to lower CPO and rubber output (January-June 2015:0.3 per cent), said the Economic Report 2016/2017 released by Ministry of Finance in conjunction with the 2017 Budget tabled by Prime Minister-cum-Finance Minister here today.
Nevertheless, it said the production of food commodities such as livestock, fruits and vegetables grew supported by various government programmes and initiatives to achieve self-sufficiency.
The report said that value-added of agro-food sub-sector grew 4.5 per cent in the 1H16 in line with the government's effort to enhance food security (January-June 2015:3.7 per cent).
As for CPO production in the first nine months of 2016 (9M2016), the MOF said, it declined sharply by 15.3 per cent to 12.6 million due to the fall in fresh fruit bunches yield to 11.6 tonnes.
"For this year, CPO output is expected to be lower at 18 million tonnes compared with 20 million tonnes last year," it said.
On the rubber sub-sector, the price of natural rubber (SMR20) averaged RM5.17 per kilogramme during the 9M2016 due to weak demand from China following anti-dumping and countervailing duties by the US on certain car tyres.
However, it said, prices are expected to remain stable as Thailand, Indonesia and Malaysia are committed to reduce exports under the International Tripartite Rubber Council.
"As an effort to encourage smallholders to continue tapping, the government has increased the activation rate of the Rubber Production Incentive Scheme to RM5.50 per kg and RM2.20 per kg effective January 2016.
"Consequently, rubber prices are expected to stabilise at RM5 per kg in 2016," it said.
Meanwhile, the mining sector grew at a moderate 1.4 per cent during the first six months of 2016 supported by the upturn in natural gas.
The report said the value-added of natural gas sub-sector rebounded 1.9 per cent due to higher output, particularly from Peninsular Malaysia and Sabah fields, compared to -1.8 per cent in 2015.
"For 2016, the mining sector is expected to grow 1.1 per cent against 4.7 per cent last year on account of higher output of natural gas with the increase in capacity following resumption of the Sabah-Sarawak Gas Pipeline project and the commencement of the Sabah Ammonia Urea and Liquefied natural gas Train 9 projects," it said.
However, it said, crude oil output is expected to decline 2.1 per cent from 9.8 per cent in 2015 due to prolonged low oil prices and rising number of matured oil fields.
The report said notwithstanding the potential Organisation of the Petroleum Exporting Countries' deal to cut production, Brent oil is expected to trade around US$40-US$45 per barrel in the second half of 2016, reflecting the current global uncertainties and continued oil glut.
In the first half of 2016 (1H16), the sector contracted six per cent due to lower CPO and rubber output (January-June 2015:0.3 per cent), said the Economic Report 2016/2017 released by Ministry of Finance in conjunction with the 2017 Budget tabled by Prime Minister-cum-Finance Minister here today.
Nevertheless, it said the production of food commodities such as livestock, fruits and vegetables grew supported by various government programmes and initiatives to achieve self-sufficiency.
The report said that value-added of agro-food sub-sector grew 4.5 per cent in the 1H16 in line with the government's effort to enhance food security (January-June 2015:3.7 per cent).
As for CPO production in the first nine months of 2016 (9M2016), the MOF said, it declined sharply by 15.3 per cent to 12.6 million due to the fall in fresh fruit bunches yield to 11.6 tonnes.
"For this year, CPO output is expected to be lower at 18 million tonnes compared with 20 million tonnes last year," it said.
On the rubber sub-sector, the price of natural rubber (SMR20) averaged RM5.17 per kilogramme during the 9M2016 due to weak demand from China following anti-dumping and countervailing duties by the US on certain car tyres.
However, it said, prices are expected to remain stable as Thailand, Indonesia and Malaysia are committed to reduce exports under the International Tripartite Rubber Council.
"As an effort to encourage smallholders to continue tapping, the government has increased the activation rate of the Rubber Production Incentive Scheme to RM5.50 per kg and RM2.20 per kg effective January 2016.
"Consequently, rubber prices are expected to stabilise at RM5 per kg in 2016," it said.
Meanwhile, the mining sector grew at a moderate 1.4 per cent during the first six months of 2016 supported by the upturn in natural gas.
The report said the value-added of natural gas sub-sector rebounded 1.9 per cent due to higher output, particularly from Peninsular Malaysia and Sabah fields, compared to -1.8 per cent in 2015.
"For 2016, the mining sector is expected to grow 1.1 per cent against 4.7 per cent last year on account of higher output of natural gas with the increase in capacity following resumption of the Sabah-Sarawak Gas Pipeline project and the commencement of the Sabah Ammonia Urea and Liquefied natural gas Train 9 projects," it said.
However, it said, crude oil output is expected to decline 2.1 per cent from 9.8 per cent in 2015 due to prolonged low oil prices and rising number of matured oil fields.
The report said notwithstanding the potential Organisation of the Petroleum Exporting Countries' deal to cut production, Brent oil is expected to trade around US$40-US$45 per barrel in the second half of 2016, reflecting the current global uncertainties and continued oil glut.