KUALA LUMPUR: The government should focus on developing the downstream sector of the palm oil industry to address the high inventories of crude palm oil, says Gerakan president Datuk Dr Dominic Lau.
“Instead of promoting a spoonful of palm oil a day, Primary Industries Minister Teresa Kok should focus on how to develop the downstream sector,” he told reporters at a press conference here.
He said the Love MY palm oil campaign did not seem to be helping the palm oil industry.
Lau said the palm oil inventories in Malaysia rose to 3.05 million tonnes in February, an 18-year-high.
He noted that there were 53 refineries in the country, with a capacity of 27 million tonnes per year. The utilisation rate was 66.7%
“If the downstream industry is well-developed, then the CPO inventories can be used up,” he said.
Lau said he had yet to see the government putting effort in promoting refined palm oil, refineries and the downstream sector.
“The Government is merely doing sales, selling CPO,” he said, adding that the government should provide attractive incentives for more investment in the downstream sector.
“Downstream products can then be exported to Europe, Middle East and United States,” he said.
Lau also suggested that the government review the export duty structure to make Malaysian crude palm oil more competitive compared to Indonesian CPO.
“Under the current export duty rate structure, there is a gap of US$20 to US$30 per tonne. It is high time for the ministry to review the structure, so that our palm oil is more competitive,” he added.
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