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Last Updated: 08 July 2022

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MEDIA STATEMENT
AUTOMATION IN THE PLANTATION SECTOR AS A LONG -TERM
SOLUTION TO REDUCE DEPENDENCE ON FOREIGN WORKERS

1. The Ministry of Plantation Industries and Commodities (MPIC) will continue seeking solutions to overcome the manpower shortage in the plantation sector, especially oil palm. MPIC is aware of the woes faced by the Malaysian Estate Owners ’Association (MEOA) where a severe labour crunch of about 120,000 workers is said to be capable of causing losses in earnings by up to 5%-10%.

2. All parties should be aware that among the main reasons for the shortage of manpower in the plantation sector was due to the closure of international borders, to curb the spread of COVID-19 in the country and protect the people from the infectious disease.

3. The ministry is currently working closely with the Human Resources Ministry, Wisma Putra, the Immigration Department and the Co-operative Commission Malaysia, among others, to look into ways to expeditiously resolve this issue.

4. The Government had in September 2021 approved plans to bring in 32,000 migrant workers for palm oil estates nationwide, and MPIC remains cautiously optimistic of achieving this target, if not more, although the issue of permits had been brought to our attention.

5. Plantation owners must also in the future, be open to workers from countries like India and Pakistan, and not be too dependent on workers from Indonesia and Bangladesh. Moving forward, MPIC hopes that plantation owners will look into long-term solutions to cut down their dependency on foreign workers.

6. Through technological studies and research conducted by the Malaysian Palm Oil Board (MPOB), plantation owners are advised to increase the use of automation such as drones for the purpose of surveillance and pest control. MPIC is confident that the use of automation at plantations will attract local workers to this sector.

7. The use of greater automation will help reduce our dependency on foreign workers and make the industry more resilient in the long-run.

8. In this respect, MPIC feels that the current labour crunch in the palm oil sector will spur planters to start investing in technological tools and boost their own bottom lines in the long-run. MPIC believes that a greater uptake in automation can help position palm oil as the preferred edibl oil globally, in line with the ongoing "Malaysian Palm Oil Full of Goodness" Campaign.

YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
18 JUN 2022

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Last Updated: 21 June 2022

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PRESS STATEMENT
MPIC REMAINS COMMITTED TO IMPLEMENTING MALAYSIA NATIONAL
BIOFUEL POLICY (NBP)

1. The Ministry of Plantation Industries and Commodities (MPIC) assured the Malaysian Biodiesel Association (MBA) that the Ministry is all ears to the group’s proposal that Malaysia should retain its existing biodiesel mandate after all.

2. MBA highlighted why Malaysia should not reduce or stop its biodiesel mandate as the biodiesel industry hardly consumes 1 million tonnes of palm oil annually as opposed to over 40 million tonnes used globally. In expressing its views, the MBA had mentioned that any knee-jerk reaction to banning biofuels derived from vegetable oils would cause havoc in the global vegetable oil market.

3. Nevertheless, it has to be highlighted that the concerns came at a ‘chaotic moment’ where MBA was reacting to a viewpoint by the Malaysian Palm Oil Board (MPOB) a day earlier – on April 25, being precise – that both palm oil exporting and importing countries should set their priorities right by “temporarily re-considering food versus fuel priorities.”

4. Recall that there was an air of desperation back then – Malaysia’s neighbor and the world’s largest palm oil exporter, Indonesia, was on the verge of putting to a halt its shipments of refined, bleached, and deodorized (RBD) palm olein. This prompted MPOB’s director-general Datuk Dr. Ahmad Parveez Ghulam Kadir –an all-around palm oil expert– to convey such views against the
backdrop of a choke in global edible oil supplies amid both adverse weather conditions and the Russia-Ukraine conflict.

5. Needless to say that disruptions from the geopolitical tension have exacerbated price rises in food commodities which were already running at 10-year highs in the Food and Agriculture Organization's (FAO) index – threatening not only a jump in global malnourishment but a spike in global inflation across both developed, developing and under-developed economies.

6. True enough, Indonesia declared an export ban on April 28 on cooking oil and its raw material (which lasted until May 23) in the quest to make cooking oil available at affordable prices for its citizens.

7. But now that normalcy has resumed and calmer heads have prevailed, MPIC wishes to state that it is all status quo on Malaysia’s biodiesel mandate front. On the same note, MPIC wants to take the opportunity to reiterate that Malaysia’s National Biofuels Policy (NBP) which was rolled out in March 2006, remains committed:

 To reduce the greenhouse gas (GHG) emissions rate in line with the
country’s aspiration towards achieving the GHG emissions reduction
target of 45% of GDP by 2030.
 To expand the use of downstream palm oil products and become an
initiative to increase the income of oil palm smallholders through palm
oil market price control mechanisms.
 To help reduce the country's dependence on fossil fuels as one of the
energy security initiatives.

8. To MBA, we thank them for their invaluable feedback on our big role and the effect of the biofuel policy towards conserving nature for younger generation Malaysians. We welcome all constructive criticism or views that can enable both sides of the divide – authorities or industry players – to derive a win-win situation.

YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
2 JUNE 2022

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Last Updated: 23 May 2022

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MEDIA STATEMENT
ECONOMIC MISSIONS TO EGYPT AND QATAR STRENGTHEN MALAYSIA
AGRICOMMODITY

1. Minister of Plantation Industries and Commodities Malaysia, YB Datuk Hajah Zuraida Kamaruddin, has concluded her Economic and Agricommodities Promotion Mission to Egypt and Qatar from 16 April 2020 to 20th April 2020. During the mission, she has taken the opportunity to meet up with her counterparts from both countries; chaired the Roundtable Meeting with Egyptian and Qataris Agricommodities Players, meeting up with the Local Investment Authorities, Academicians, and the Local Women Entrepreneurs and Diaspora.

2. Among the Ministers and foreign dignitaries who met up with YB Datuk, Zuraida Kamaruddin are H.E. Mrs. Navine Gamea- Ministry of Trade and Industry of Egypt; H.E. Minister Dr. Ali El Moselhy- Ministry of Supply and Internal Trade of Egypt; H.E. Dr. Abdullah Bin Abdulazizi Bin Turky Al Subaie- Ministry of Municipality, State of Qatar; H.E. Sheikh Mohammed bin Hamad bin Qassim Al-Abdullah Al-Thani- Minister of Commerce and Industry of Qatar; H.E. Dr. Sherif el Gabaly, member of Egyptian Parliament and Chairman of EgyptianMalaysian Business Council. She also had a meeting with Counselor Mohamed Abdel Wahab- CEO of General Investment and Free Zones of Egypt, and Professor Dr. Hanafy Hashim, Head of Food Science & Technology, as well as Professor Dr. Gamel Abdrabuh, Dean of Faculty of Agriculture, Universiti AlAzhar.

3. As part of MPIC’s initiatives in promoting Malaysian agricommodity products, the round table discussions will bridge the trade promotional activities, business cooperation, and information exchange between governments and key players from within the industry, particularly for palm oil, rubber, and timber products.

4. The palm oil price has been at the forefront of edible oil news since the pandemic started in 2020 and due to recent ongoing conflict in Europe. The current price surge is driven by the outlook for the supply of substitute vegetable oils due to uncertainty over sunflower seed oil from Ukraine and Russia. Tight supply from the producing countries has also impacted the global palm oil price.

5. Malaysian Palm Oil Board (MPOB) anticipated crude palm oil (CPO) production to improve by 4.9% to 19 million tonnes this year, from 18.12 million tonnes in 2021, resulting in palm oil stocks increasing 21.1% to 1.95 million tonnes, from 1.61 million tonnes in 2021. This is excellent news to the industry players and market onlookers. It shows Malaysia is prepared to meet the encouraging demand for palm oil from the market, including from Egypt and Qatar. A few promising ideas, such as including Malaysia Palm Oil in the Egyptian Food Subsidy Scheme and exploring the private sectors, are further the applications of the rubberized road in Qatar. Further discussion is being conducted, and Malaysia is hopeful that the initiatives will benefit all involved parties.

6. The Hon. Minister has conducted missions to several countries beginning the year 2022 to increase exports of Malaysian commodities, especially palm oil. The countries visited are Saudi Arabia, Iran, Turkey, Pakistan, India, Bangladesh, Egypt, and Qatar. Malaysian companies also took part in these Ministerial missions to strengthen and re-establish bilateral relations. Among
the achievements are proposals to establish joint venture partnerships in India and Pakistan. There were also proposals from Qatar and Egypt to invest with Malaysian companies to set up production facilities in Malaysia. This is seen as a strategic move that will accelerate the commodities export to the regions.

YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
20 APRIL 2022

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Last Updated: 21 June 2022

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MEDIA RELEASE
MPIC TO MONITOR INDONESIA’S LATEST DEVELOPMENTS; CONFIDENT CPO
DEMAND REMAINS ROBUST

The fact that palm oil stockpile increased for the first time since October 2021 by 11.5% month-on-month (mom) to 1.64 million tonnes in April 2022 driven by higher output (+3.6% to 1.46 million tonnes) and weaker exports (-17.7% to 1.06 million tonnes) should not be a cause for concern.

This is because palm oil stockpile will likely dip in May 2022 on the back of seasonally lower crude palm oil (CPO) production (arising from the Ramadhan month) and stronger exports (following the Indonesian Government’s recent move to widen its export ban on raw materials for cooking oil).

However, Indonesia announced yesterday (May 19) that it has decided to lift its palm oil export ban from May 23 (Monday) following improvements in the domestic cooking oil supply situation and as Jakarta considers the welfare of 17 million workers in the palm oil industry.

Meanwhile, exports were dragged by lower exports to China (-50.8%), European Union (EU) (-23.2%) and Pakistan (-90.3%) due to several factors including (i) strict COVID-19 lockdowns which hampered palm oil shipments to China, and (ii) demand destruction as a result of high prices.

Nevertheless, preliminary data from AmSpec Agriculture Malaysia indicated that palm oil shipments alone have surged by 40.32% during the first 10 days of May on account of Indonesia’s absence from the global export market, a weak ringgit and widening palm discounts to bean oil.

CPO PRICE SPIKE

Recall that CPO prices surged past the RM7,000/tonne mark to hit its period peak of RM7,516/tonne following news that Indonesia had banned palm oil exports from April 28. The ban would only be lifted if the bulk cooking oil price comes down to 14,000 rupiah/litre across Indonesia (as of May 6, the average local price of cooking oil has dropped to 17,200 rupiah/litre from around 26,000 rupiah/litre).

Given Indonesia's reliance on palm oil exports and how a prolonged ban could seriously damage Indonesia's economy, the country as expected, has rescinded the decision to ban its palm oil exports. As it is, the MPIC wishes to put on record that it is in the midst of discussing with the Finance Ministry to look into the viability of slashing Malaysia’s export tax of palm oil to 4%-6% from the current 8% while at the same time to slow down the implementation of Malaysia’s biodiesel mandate to help meet the global demand amid an edible oil shortage.

This proposed temporary cut is pending a decision and We believe that Malaysian exporters are likely to be clear winners in the short term as global buyers will source for Malaysian palm oil.
Nevertheless, the MPIC urges industry players to focus closely on market variables that are capable to spark price volatility.

In the list of these variables are:

(i) the export policy of Indonesia
(ii) the recovery of palm oil production in Malaysia;
(iii) the adjustment of biodiesel policies in various countries;
(iv) progress of the Russia-Ukraine conflict; and
(v) the weather in both the US and South America.

STILL BULLISH PROSPECTS (FOR NOW)

On broader terms, the soft exports in April could be misleading as we believe international demand for edible oils which include palm oil is far from weak. April prices may be lower than March but remained at unprecedented levels. Year-to-date (YTD), CPO prices have averaged circa RM6,300/tonne which is significantly higher than the RM4,300/tonne average as projected by market analysts for 2022.

Looking ahead, CPO prices are likely to consolidate downward due to pending uptrend in monthly fresh fruit bunches (FFB) production rather than poor demand. Nevertheless, CPO prices should stay elevated due to the following factors:

•Tight supply: Supply of edible oils which are competing with palm oil is tight across the world. Henceforth, prices of vegetable oils such as soybean, rapeseed and sunflower oils are also strong. Together with seasonally stronger palm oil production in 2H 2022, edible oils and fats supply tightness should ease by 4Q 2022 but not by much. The prospect of a recovery is more likely in 2023; hence, palm oil prices may stay elevated till about mid-2023.

•Robust market: Despite some “demand destruction” due to very high prices, the overall market for palm oil is expected to remain robust. Indonesia’s challenge to meet domestic requirement indicate the strength of the international market for palm oil.

•Uptake from China: A key market for palm oil, China is poised to increase its palm oil demand later in the year as its economy is only gradually re-opening from the COVID-19 pandemic. Similarly, demand from the EU is likely to rise following the disruption to its traditional supply of sunflower and rapeseed oil from Ukraine and Russia.

•Oil price hike: The Russia-Ukraine conflict has also pushed up the prices of hydrocarbon fuels, creating a latent or “hidden” demand for biofuels if vegetable oil prices were to fall sufficiently.
The Ministry will continue to ensure that the palm oil industry, which is the country's main commodity, continues to contribute to national economic growth, thus benefiting all, especially smallholders and industry players.

The Ministry will continue to monitor the current situation involving Indonesia’s policy changes to ensure that the palm oil industry, which is the country's main commodity, continues to contribute to the country's economic growth, thus benefiting all, especially smallholders and industry players.

YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
20 MAY 2022