26/09/2007 (Business Times) - YEE LEE Corp Bhd, a cooking oil manufacturer, says the Supply and Cooking Oil Price Stabilisation Scheme does not provide adequate compensation and payment is slow.

Three months ago, the government implemented the scheme to compensate losses incurred by cooking oil manufacturers due to sky-high palm oil prices, which made the main ingredient of cooking oil very costly.

Essentially, the Supply and Cooking Oil Price Stabilisation Scheme taxes oil palm estate owners to compensate cooking oil manufacturers.

Plantation Industries and Commodities Minister Datuk Peter Chin was reported to have said that the cess imposed upon oil palm estates will only run Reutersfor a year, at the most.

Under the scheme, the Malaysian Palm Oil Board (MPOB) collects cess from oil palm estate owning more than 40ha from June 2007 until May 2008. This money is then given to cooking oil manufacturers for losses incurred from January 2007 to May 2008.

“We’re thankful that we’re being compensated but it must be noted that we have been experiencing losses since October 2006,” said Yee Lee executive director Francis Chok Yin Fatt.

Since October 27 2006, the price of refined, bleached and deodorised (RBD) palm olein price surpassed the threshold price of RM1,700 per tonne.

But the Malaysian Palm Oil Board (MPOB) only started collecting cess from oil palm estate owners from June 1 2007.

Cooking oil manufacturers who have submitted their claims for the first eight months of this year have yet to be fully compensated.

“So far, we’ve received half of the claims from January to April. We’ve also received payment for June but not for May, July or August,” he said.

Yee Lee suggested fine-tuning of the Supply and Cooking Oil Price Stabilisation Scheme.

“The 1997 ceiling prices should be adjusted to more realistic levels that truly reflect the current higher fuel, transport, packaging, financing and administrative costs,” Chok said.

“Considering that cooking oil is a commodity-based product, the cess imposed should be activated automatically when all parameters are met,” he added.