The govt has allocated a subsidy for 720,000 tonnes of cooking oil, Zuraida says
by S BIRRUNTHA / Pic by TMR FILE PIX
THE Ministry of Plantation Industries and Commodities (MPIC) expects to finalise the targeted subsidies for cooking oil by the end of this year.
Minister Datuk Zuraida Kamaruddin said the plan was put in motion following discussions with the Finance Ministry (MoF) and the Ministry of Domestic Trade and Consumer Affairs during the ministerial retreat last month.
She noted that the government has allocated a subsidy for 720,000 tonnes of cooking oil.
“We want to help those who are in need at a time when crude palm oil (CPO) is trading high,” she said during the 2022 Palm & Lauric Oil Conference in Kuala Lumpur yesterday.
The Russia-Ukraine war was one of the major factors in the CPO surge to RM8,000 per tonne last week.
The Malaysian Palm Oil Board has also predicted that the price of the edible oil will remain above RM5,000 level per tonne at least for the first half of 2022 (1H22).
Meanwhile, Zuraida also highlighted that Malaysia exported over 25.4 million metric tonnes (MT) of oil palm, valued at RM108.5 billion in 2021.
She said while this is a drop in total number of 2020 exports at over 26.6 million MT, this is an increase in total value of exports which was over RM73.3 billion in 2020, a 48% increase.
Nevertheless, she said as MoF is projecting an economic growth forecast range of 5.5% to 6.5% in 2022, coupled with the gradual reopening of the country’s economies, MPIC is cautiously optimistic that these figures will improve for the year.
“The palm oil industry has met its fair share of sceptics and debates. We are aware of the perception of the palm oil industry and are doing our best to address these concerns.
“At its core, the ministry conducts all key initiatives with our vision, mission and objectives in mind. In short, our key guiding principle is to advance the Malaysian agri-commodity sector to ensure a shared prosperity amongst the public,” she added.
Commenting further, Zuraida said MPIC has reaffirmed its intentions to publish a revised policy statement, the National Agrocommodity Policy 2021-2030, which will be centred around five guiding concepts, namely sustainability, technology, value-added, inclusivity and the distribution of wealth.
To further re-affirm the ministry’s commitment to sustainability, she said MPIC is resolute in making sure this policy is in line with the United Nations Sustainable Development Goals 2030.
Meanwhile, Zuraida also acknowledged the memorandum of understanding between Bursa Malaysia Derivatives Bhd (BMD) and the Malaysian Palm Oil Certification Council to establish a mutually beneficial partnership that promotes sustainability and responsible practices among the palm oil players across the supply chain.
“As the world adopts environmentally and socially conscious practices, it is vital and paramount that we do so as we not only want to remain competitive but also play our part in sustainability.
“Despite the challenges brought by Covid19, I am elated to see that BMD achieved the highest yearly trading volume for its CPO Futures (FCPO) contract last year.
“Where uncertainties in prices are present, adopting sound risk management strategies should remain a top priority,” she added.
According to Zuraida, Malaysia is the second largest producer of palm oil globally and offers a wide range of trading and hedging opportunities for institutions, traders, buyers and suppliers to trade and manage risk.
She said the BMD’s FCPO has served as the global price benchmark for the crude palm oils, adding that it has gained traction from international traders as well as foreign trading participants and has grown over the years.
Therefore, she emphasised that companies should consider managing their exposures to today’s volatile markets by hedging using the futures and options contracts available on BMD, due to the current uncertain global conditions.