Standalone commodities and trade ministries needed, urges an expert

Speculation is rife that the 2 ministries will be merged with the new Economic Affairs Ministry

By ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL

The government needs to retain the Plantation Industries and Commodities Ministry and International Trade and Industry Ministry in view of the sector’s importance, as well as the trade threats that are expected from the US and China.

Industry consultant M R Chandran (picture) said there is an air of concern that low priority has been given to what he described as “important” ministries.

Speculation is rife that the two ministries will be merged with the newly established Economic Affairs Ministry, which is led by former Selangor Mentri Besar Datuk Seri Mohamed Azmin Ali.

However, the office is already subjected to plans of reshuffling key economic departments and government-linked investment companies that are currently under the purview of the Prime Minister’s Department and the Finance Ministry respectively.

Chandran said the plantation sector needs a dedicated ministry due to the significance of the industry to the Malaysian economy.

Exports of palm oil and palm products alone had contributed nearly RM80 billion to the national income last year, while the plantation industry is the country’s largest employer.

“From that point of view, it is somewhat surprising that we do not have a commodities or trade minister yet,” Chandran told The Malaysian Reserve.

He added that there is also an urgency to look into the duty structures that have been imposed by India, the world’s largest vegetable oil importer.

In May, India’s palm oil imports plunged to its lowest since February 2014, as higher import tax on the tropical oil made it more expensive. Lower imports by India are expected to add pressure on local palm oil futures that were trading near their lowest in 22 months.

The Pakatan Harapan government’s plan to reduce the country’s reliance on foreign workers has also given a different set of worries to the plantation industry, which is labour dependent.

“The government cannot turn around and say we must mechanise and reduce the number of foreign workers. The industry relies heavily on them.

“Even if we offer RM1,500-RM2,000 of minimum wage, we are not going to attract local labour because of their disinterest,” Chandran said.

He said all these factors need serious consideration that cannot be delayed any further.

“We hope the appointment will be made soon. Once that is made, the minister can get the feedback from the industry and strategise for the next five to 10 years,” he said.

Prime Minister (PM) Tun Dr Mahathir Mohamad has yet to reveal his full 25-member Cabinet, with many anticipating the decision to be made within this week after six weeks of careful consideration and selection from his four-party Pakatan Harapan pact.

Former PM Datuk Seri Mohd Najib Razak had 37 ministers under his administration.

In reference to the current government’s prudent ways, Chandran said the plantation industry can be utilised to give additional income to the country, similar to the support expected from state energy firm Petroliam Nasional Bhd.

Chandran said the industry has long served as a “cashpile” for state governments in Sabah and Sarawak.

“The Sabah state administration receives close to RM1 billion in sales tax each year. If you factor in the state sales tax and profit levy, we are contributing an additional of up to 10% on top of the 24% corporate tax that we pay,” he said.