We need to be one step ahead in tackling palm oil market volatility, says Daim

Council of Eminent Persons chairman Daim Zainuddin.

KUALA LUMPUR: Malaysia must be one step ahead in planning ways to react to the price volatility in the palm oil market, Council of Eminent Persons chairman Daim Zainuddin said.

This will help protect the country’s source of income as well as the wellbeing of the smallholders, he said.

Daim said since Malaysia is a small country and 80% of its crude palm oil (CPO) and palm oil-based products are exported, it is vital for the country to team up with Indonesia, the world largest producer of the commodity, especially in tackling the challenges from the European Union and the US-China trade dispute.

“We must work together with Indonesia because Malaysia alone is a small nation (with 31 million people as at 2017). Together with Indonesia, home to 264 million people, we can fight the battle together,” he told Bernama.

Noting that the price of CPO depends on market forces, he said “this was normal even during my time” (as finance minister).

“So, it’s not something new. But, now, with the ongoing threats coming from the EU and the US-China trade dispute, we need to be smart.”

Daim said while it is good news that the US and China are about to wrap up their trade talks, the Malaysian government, its agencies and industry players must also be alert on what transpired during the deals.

In March last year, US President Donald Trump imposed tariffs of up to 25% on Chinese imported goods.

Likewise, the Chinese government retaliated by imposing tariffs of 25% on US$110 billion worth of US goods, including soybean, which is the US’ most important agricultural export crop.

This has opened up more opportunities for other edible oils, including palm oil.

“But don’t react when it’s too late, because it might affect our market and the smallholders,” he said.

China is the third largest buyer of Malaysian CPO after India and the EU.

But following the signing of the new deal on the East Coast Rail Link project on Monday, Prime Minister Dr Mahathir Mohamad said Putrajaya will take advantage of the agreement to work out the purchase of palm oil from China.

Meanwhile, Daim urged youths to venture into modern agriculture using the latest technology.

“There are crops that we can plant using science and technology. They can either grow vegetables or fruits, or they can venture into the fishery industry.

“They can consider this to be their full-time or part-time job.

“I went to Sabah recently where I visited an entrepreneur’s farm.

“He has about 5,000 heads of cattle, fish ponds, as well as pineapple and durian plantations.

“I asked him how much revenue he earned. He did not answer but I’m assuming he must be earning about RM500 million yearly.

“I believe we can also do that here but the most important thing is that we need to ensure that we produce good-quality products.

“We also need the full commitment of the government on modern farming,” he said.