Sabah mulls setting up state palm oil board to solve industry woes
Malay Mail (21/12/2020) - KOTA KINABALU, Dec 21 — Sabah will study establishing a state palm oil board to better manage the development of one of its main commodities and income earners.
Deputy Chief Minister III and State Minister of Industrial Development Datuk Joachim Gunsalam said that the palm oil industry was one that needed close monitoring, together with investors, and that the state has considered setting up its own palm oil board before.
“The proposal to set up a Sabah Palm Oil board has been brought up by my predecessors in the ministry.
“As this government has only been in power for about three months, we have not yet given it due consideration. But the state government through my ministry will now do the necessary research to see whether setting up such a board is viable,” he said.
He said this during the question-and-answer session at the State Assembly today, in response to Elopura assemblyman Calvin Chong.
Joachim said that setting up a new agency to oversee the industry would be a costly venture, involving funds, policy and function change, planning and implementation.
For now, the Malaysian Palm Oil Board (MOPB) is the sole body responsible for planning, research and development of the country and state’s palm oil industry.
He said that the formation of such a body in the state is needed to empower downstreaming activities which the state lacks.
The state, the main producer of palm oil for the country at nearly 30 per cent, has 1.3 million hectares of palm oil, which is roughly 90 per cent of all agriculture land in Sabah.
It contributed some RM2.7 billion to the Gross Domestic Product for Sabah in 2019, and RM798.57 million in Crude Palm Oil (CPO) sales tax.
Joachim said there were not enough investors doing downstreaming activities in the specially set up Palm Oil Industrial Cluster (POIC) in Lahad Datu.
“This is due to constraints faced by current investors such as consistent and adequate supply of empty fruit bunches, palm kernel shells and crude palm oil. There are also infrastructure challenges such as poor road connectivity, water and electrical issues, lack of local experts and other problems which makes setting up of oleochemical plants an issue.
“Such technical and non-technical issues need to be solved in order to attract more investors and thus, the proposal of setting up a Sabah Palm Oil board now is timely and necessary,” he said.