Low prices leave Sabah oil palm smallholders in dire straits

Sabah is the largest producer of palm oil in the country and has about 200,000 smallholders. (AFP pic)

KOTA KINABALU: Local oil palm operators are finding it harder to make ends meet following the continued decline in the price of fresh fruit bunches (FFB) nationwide.

Sabah Malaysian Palm Oil Association executive secretary Genga G Pillai said currently, there is an oversupply in stock which had forced major mills and refineries to sort out the stockpiles of mega companies before dealing with smallholders.

“They have to be selective because they do not have sufficient capacity to process all.

“That is why we are hoping the government can come up with some mechanism to help those who are not able to get into the market,” he told the media today.

Genga blamed the low price of FFB to several factors, including stiff competition in the market from Indonesia as well as the constant attacks from environmentalists and NGOs, both foreign and local.

At the moment, he said the price of palm oil is at its lowest in five years.

Some planters are even willing to sell their stocks at unfavourable prices as long as they can get rid of their stocks.

Hence, Genga advised oil palm operators, especially smallholders, to be patient while some concrete measures are taken to tackle the issue.

He also urged oil palm planters to diversify their crops and invest their earnings on other things for now.

Sabah is the largest producer of palm oil in the country and has about 200,000 smallholders.

Prices of FFBs in Sabah are lower than those in the peninsula and Sarawak.