The current government's good diplomatic relations, especially with key CPO buyers such as India and China, have led to stronger exports on a year-on-year basis and as a result lifted CPO prices.
This is further supported by the government's initiatives to completely exempt the export duty of CPO, crude palm kernel oil and RBD palm kernel oil under the Penjana stimulus package.
Ahmad Jazlan, who is also Machang MP from UMNO, said the CPO has touched RM3,581.50 per tonne on Nov 19, which is the highest level since 2012.
"The performance of CPO price for the period of Jan-Oct 2020 which was RM2,583.50 per tonne, increased by RM575 or 28.6% compared to RM2,008.50 per tonne in the same period in 2019," said Ahmad Jazlan.
Speaking during a press conference on Monday, he expects the CPO prices to remain above RM3,000 per tonne by end- 2020 and moving into 2021.
"The increase in the CPO and fresh fruit bunches prices contributes to the income of plantation operators and smallholders as well as the country's export income.
"Among the factors that led to the higher prices are low palm oil stocks, low palm oil production, high exports of palm oil and rising oil prices of competitors," stated Ahmad Jazlan.
Thanks to the high CPO prices, Ahmad Jazlan expects the government to receive RM348mil in windfall tax revenue in 2020.
In contrary, the windfall tax collection last year stood at a meagre RM258,000, owing to low CPO prices.
According to Ahmad Jazlan, in Peninsular Malaysia, a windfall tax of 3% is only imposed when CPO prices are above RM2,500 per tonne.
Meanwhile in Sabah and Sarawak, windfall tax is imposed at 1.5% once CPO prices breach above RM3,000 per tonne.
Did you find this article insightful?
64% readers found this article insightful