Sabah oil palm smallholders suffering due to price slump, says PBS

PBS vice-president Johnny Mositun says urgent measures like a minimum price or a monthly cash allowance need to be given to smallholders in Sabah. (Bernama pic)

KOTA KINABALU: PBS vice-president Johnny Mositun has urged the federal government to come to the aid of smallholders in light of the current slump in palm oil futures.

He said the current slump, with prices hovering at around RM2,160 per tonne, is hitting producers, especially smallholders, badly.

Reports from Sabah’s east coast, a major palm oil-producing region, say that some mills and refineries are focused on clearing stockpiles of large companies before they will buy from smallholders, even at below production and delivery cost.

“I have been given to understand that limited capacity is one of the reasons for this.

“What concerns me is the plight of smallholders, some 200,000 of them in Sabah,” Mositun said in a statement here today.

“Lately, we’ve been hearing that in our east coast districts, many are offering fresh fruit bunches (FFB) at a loss of RM169 per tonne but there are few buyers. It’s a desperate situation for them.”

The former Sabah state assembly deputy speaker said multinationals and plantations had the resources to ride out the palm oil slump but not the smallholders.

“They are in need of urgent support and assistance. The government should come up with a contingency relief plan for the smallholders, at least for now.

“Examine all other possibilities, including a minimum price for smallholders or a monthly ‘cash allowance’ akin to the fishermen’s assistance scheme.

“Don’t just wait till they go bankrupt,” Mositun said.

Calling on Putrajaya and the Malaysian Palm Oil Board to show more urgency in the matter, he said Malaysia should do more to fend off competition from Indonesia on a sustained basis instead of relying on ad hoc reactions.

“The competition from Indonesian palm oil is a long-term reality. We should not forget the lessons during the era of natural rubber.

“The same thing is happening with the palm oil industry. A comprehensive policy, holistic approach and sustained action plan is needed.”

Raise palm oil content in biodiesel

Mositun said the use of palm oil could be stepped up if the government adopted the higher biodiesel rating Indonesia had already legislated.

“In Malaysia, we use 5% palm oil in biodiesel whereas Indonesia has legislated 30%.

“We must step up usage of palm oil in the non-food sectors,” Mositun said.

He suggested that a sustained dialogue with China and India, the biggest buyers of Malaysian palm oil, could persuade these two countries to increase their imports from Malaysia.

“I also think the government should look for new markets for Malaysian palm oil in South and Central America, the Arab countries and even Russia and Eastern Europe,” he said.

Mositun also urged the state government to press Putrajaya for urgent assistance in this matter.