21/10/2008 (The Star Online), Kuching - The Government may remove the crude palm oil (CPO) windfall tax, given that CPO prices have fallen below the tax’s threshold level.

Plantation Industries and Commodities Minister Datuk Peter Chin said he would propose to Prime Minister Datuk Seri Abdullah Ahmad Badawi and the Cabinet to remove the excess profit tax on CPO. Abdullah will chair the Cabinet Committee on Competitiveness of Palm Oil meeting today.

“CPO prices have been declining recently, contributed among others by the global economic slowdown. As such, there is no reason to implement the windfall tax. It is also in the best interest of the industry players, which have been asking the Government to review the tax.

“However, I am confident that CPO prices will recover as they have in the past,” he said yesterday after the opening ceremony of ModiPalm Engineering Sdn Bhd’s continuous sterilisation forum.

The CPO windfall tax was introduced when the CPO price was at a higher level. But it has taken a hit in tandem with crude oil recently. The current threshold of the windfall tax is RM2,000 per tonne.

Chin said that he would also propose during the meeting to introduce a mechanism to address the slide in CPO prices.

“We may even collaborate with the world’s largest oil palm producer, Indonesia, on how to synergise market supply and production programmes to boost CPO prices. We may also set up a meeting this week with suppliers to tackle the issue of high fertiliser costs that have burdened planters,” he said, adding that fertilisers made up 50% to 60% of fresh fruit bunches’ cost.

ModiPalm’s continuous sterilisation system (CSS) is a low pressure-modern oil palm mill that provides several advantages over the conventional method. It requires less manpower and less maintenance. It also offers a safer working environment and is automated.