The Malaysian Reserve (19/08/2021) - CRUDE palm oil’s (CPO) export duty collected for the first five months of this year surged five times or RM111 million to RM564.82 million compared to similar periods last year following the increase in the commodity price.

The Plantation Industries and Commodities Ministry (MPIC) said the increase in CPO prices has positively impacted oil palm farmers and the palm oil contribution to the country’s gross domestic product (GDP).

“The gross annual income from palm oil sales in 2020 for the peninsula is estimated at RM9,570/ha. Meanwhile, in Sabah and Sarawak, the sales revenue stood at RM7,756/ha and RM7,650/ ha, respectively.

“To ensure the increase in CPO prices in the world market benefit all groups and to minimise the negative impact, the government is studying several mechanisms so that it can be enjoyed by all walks of life in the future,” the ministry said in a statement.

Last year, MPIC said Malaysia had exported 17.4 million tonnes of CPO, or 18.3% of the world’s total vegetable oil and fats exports.

It added that the export contribution from oil and palm-based products to the country’s export earnings has increased to RM73.25 billion last year compared to RM67.55 billion in 2019.

“The contribution of the palm oil sub-sector to Malaysia’s GDP in 2020 totalled RM48.31 billion or 56.8% of the total contribution of the agri-commodity sector.

“MPIC believes Malaysia’s position will not be compromised this year as until the second quarter of 2021, palm-based products were the largest contributor at 43% of total agri-commodity exports and recorded an increase to RM46 billion from RM33 billion last year,” it said.

The ministry said the windfall profit levy collection is estimated to be at RM950 million this year compared to RM165 million in 2020 due to the CPO prices exceeding RM3,500 per tonne from January to May 2021 coupled with the estimated CPO price exceeding RM2,500 per tonne until December 2021.

The increase in CPO prices is seen to have a more positive effect on the people. In principle, every increase in the CPO price in the world market will have a ripple effect on the global economy such as the increase in national income, smallholders’ livelihood and the retail price of cooking oil.

MPIC believes the agricultural commodity sector, especially the palm oil sub-sector, will continue to play a contributing role to the economic outlook which is more positive throughout the year, as well as providing economic wellbeing to over 500,000 smallholders of oil palm across the country.