Policy to protect palm oil

Commitment: Masidi (second from left) visiting a display of palm oil products during the inaugural palm and lauric oil conference and exhibition in Kota Kinabalu. — Bernama

KOTA KINABALU: A policy initiative will be put in place to protect the resilience of the palm oil sector while making Sabah a global leader in sustainable palm oil production, said Chief Minister Datuk Seri Hajiji Noor.

He said this initiative will be done through the concurrent implementation of the Jurisdictional Certification of Sustainable Palm Oil and the Malaysian Sustainable Palm Oil certification.

“These certifications are aimed at achieving the internationally-recognised Roundtable on Sustainable Palm Oil (RSPO) standard,” he said in his keynote address at the inaugural East Malaysia Palm and Lauric Oil Price Outlook Conference and Exhibition (emPOC2022) yesterday.

Hajiji’s speech was delivered by Local Government and Housing Minister Datuk Seri Masidi Manjun.

“Consistently over the years, various initiatives have been introduced and implemented by the state government to ensure the palm oil sector remains its key economic driver,” he said.

He said the state government will continue pursuing efforts to increase the crude palm oil (CPO) yield through precision agriculture, farm mechanisation, and control of pests and diseases.

Hajiji said Sabah was putting a lot of effort into using technology and new ideas to make the country more productive and competitive.

The Chief Minister said the price of CPO in Sabah had increased by 26.8% to reach RM5,372.50 per tonne for the period of January to August 2022 compared with RM4,505.50 per tonne in 2021.

He attributed the increase in the price of CPO to the rise in the world soybean oil price, the disruption of palm oil supply as a result of labour shortages in the plantation sector and the effect of the increase in Brent crude oil prices in the world market.

In terms of production, Sabah’s production of CPO in 2021 was recorded at 4.36 million tonnes, with 4.02 million tonnes exported to countries such as the United States, China, the European Union (EU) and South Korea, said Hajiji.

“For the period of January to August 2022, the export of palm oil and other palm-based products amounted to 3.04 million tonnes, compared with 2.98 million tonnes in the same period last year,” he said.

The export value of palm oil and other palm-based products generated by the state amounted to RM19.9bil, a hike of 32.7% compared to about RM15bil in 2020, he said.

“With export contributions amounting to billions of ringgit, it is without a doubt that the palm oil industry played a major role in boosting the state’s economic growth, reaping socio-economic benefits for the people,” he said.

At the moment, nine palm oil refineries are operating in Sabah with a processing capacity of 7.48 million tonnes per year, with two biodiesel factories operating to produce 300,000 tonnes of palm-based biofuel annually.

Hajiji said the Sabah government will push to ensure the state’s participation in the oil palm downstream sector, which will help maximise its advantage as a major player in planting and producing palm oil in Malaysia.

He added the state government had established the Palm Oil Industrial Clusters (POIC) Lahad Datu and POIC Sandakan as development hubs for the palm oil industry to spearhead the development of palm oil-based downstream activities.

Both POICs were developed with facilities and equipment integrated with port facilities to support the import and export of palm products.

He encouraged palm oil industry players in Malaysia to invest in the downstream palm oil industry by developing oleochemical factories in Sabah, as there was none at the moment.