Govt calls on palm oil companies to be ‘price makers’

Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong delivered his messages at the 2016 MPOB and Oil Palm Industry night of Excellence in Putrajaya.MOHD SAHAR MISNI/The Star

PUTRAJAYA: The Government is urging local palm oil companies to go downstream and become “price makers” by embracing science, technology and innovation to reap the rewards of the sector.

Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong (pic) said the commodities sector was far from being a “sunset industry.”

“I believe the success of the country’s future is dependent on a commodities sector that is modern, competitive and sustainable,” he said in his keynote address during the MPOB & Oil Palm Industry Night Of Excellence 2016 yesterday.

Mah said for 100 years, Malaysia had become a “price taker,” and should now shift its focus to becoming a “price maker.”

“Price takers are in the upstream and price makers are in the downstream.

“To become a price maker, advancement in science, technology and innovation is key.

“It is at this level where we can set high prices for our premium, quality products.

“More profits, products and demand,” he said.

To encourage the palm oil industry to move further downstream and add value to their end-products, the Government, through the 11th Malaysia Plan (11MP), has allocated RM280mil in grants for industry players.

Apart from targeting the big players, the government is also assisting small and medium enterprises (SMEs) in the industry, with RM50mil of the grants dedicated to this group. In 2015, 68.6% of the country’s palm oil exports were within the upstream and midstream segments, consisting of crude palm oil and processed oil.

The export value of the crude palm oil was RM12bil and processed oil brought in RM28.2bil.

The downstream sector, while only accounting for 30.1% of total exports, saw oleo-chemicals raking in RM14.9bil and exports for finished products amounting to RM1.7bil. In 2015, the export of commodities and commodity products was worth over RM117.16bil, the second largest segment after electronics. The export of palm oil was valued at RM63.2bil.

During the 10th Malaysia Plan (10MP), the Government had committed RM416mil worth of grants for commercialisation projects, while the private sector committed RM2.9bil in investments.

Meanwhile, the MPOB & Oil Palm Industry Night Of Excellence is an annual award aimed at recognising the best-performing players in the local oil palm industry.

Winners from over 20 categories were recognised for their excellence last night.

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