Policy initiative to make Sabah palm oil world leader, says Hajiji
12/10/2022 (The Star Online), Kota Kinabalu - A policy initiative will be put in place to set Sabah up as a global leader in sustainable palm oil, says Chief Minister Datuk Seri Hajiji Noor (pic).
He said this initiative will be done through the concurrent implementation of the Jurisdictional Certification of Sustainable Palm Oil (JCSPO) and Malaysian Sustainable Palm Oil (MSPO) certification.
“These certifications aim at achieving the internationally-recognised Roundtable on Sustainable Palm Oil (RSPO) standard.” added Hajiji.
He said in his keynote address at the inaugural East Malaysia Palm and Lauric Oils Price Outlook Conference and Exhibition (emPOC2022) on Wednesday (Oct 12) that this will also protect the resilience of the palm oil sector in Sabah.
Hajiji’s speech was delivered by Local Government and Housing Minister Datuk Seri Masidi Manjun.
“Consistently over the years, various initiatives have been introduced and implemented by the state government to ensure the palm oil sector remains its key economic driver,” he said.
He said the state government will continue pursuing efforts to increase the crude palm oil (CPO) yield per hectare through precision agriculture, farm mechanisation and the control of pests and diseases among other measures.
Hajiji said Sabah is also focusing on leveraging technology and innovation to increase productivity and competitiveness of the oil palm downstream sector.
The Chief Minister said the price of CPO in Sabah has increased by 26.8% to reach RM5,372.50 per tonne for the period of January to August 2022 compared with RM4,505.50 per tonne in 2021.
He attributed the increase in the price of CPO to the rise in the world soybean oil price, the disruption of palm oil supply as a result of labour shortages in the plantation sector and the effect of the increase in Brent crude oil prices in the world market.
In terms of production, Sabah’s production of CPO in 2021 was recorded at 4.36 million tonnes with 4.02 million tonnes exported to countries such as the United States, China, the European Union (EU) and South Korea, said Hajiji.
“For the period of January to August 2022, the export of palm oil and other palm-based products amounted to 3.04 million tonnes has increased by 58,343 tonnes compared with 2.98 million tonnes in the same period last year,” he said.
The export value of palm oil and other palm-based products generated by the state amounted to RM19.9bil, a hike of 32.7% compared to about RM15bil in 2020, he said.
Hajiji said supported by the rise in global market price, the export value for the period of January to August 2022 has increased by RM5.87bil or 53% to reach RM16.94bil compared with RM11.08bil in the corresponding period last year.
“With export contributions amounting to billions of ringgit, it is without a doubt that the palm oil industry plays a major role in boosting the state’s economic growth and reaping socio-economic benefits for the people,” he said.
At the moment, nine palm oil refineries are operating in Sabah with a processing capacity of 7.48 million tonnes per year, with two biodiesel factories operating to produce 300,000 tonnes of palm-based biofuel annually.
Hajiji said the Sabah government will push the momentum to ensure the state’s participation in the oil palm downstream sector to maximise its advantage as a major player in planting and producing palm oil in Malaysia.
Hajiji said the state government had established the Palm Oil Industrial Clusters (POIC)at Lahad Datu and POIC Sandakan as a development hub for the palm oil industry to spearhead the development of palm oil-based downstream activities.
Both POIC Lahad Datu and Sandakan were developed with facilities and equipment integrated with port facilities to support import and export activities of palm products which will be used by the industry and investors.
He said based on the progress in the palm oil sector and improvement of infrastructures, as well as the availability of attractive government incentives, this will provide excellent business opportunities for industry players to venture into the downstream sector.
He encouraged palm oil industry players in Malaysia to invest in the downstream palm oil industry by developing oleochemical factories in Sabah, as there is none at the moment.
The Chief Minister assured that the state, through the Industrial Development Ministry, was committed to help coordinate and facilitate the investment and development of oleochemical factories.