KUALA LUMPUR: The primary industries ministry is looking to get the country’s oil palm smallholders included in the upcoming economic stimulus package to mitigate the impact of the Covid-19 outbreak.
“My ministry will submit a proposal to the finance ministry for their consideration,” said primary industries minister Teresa Kok today when asked whether there are any specific plans to include smallholders in the stimulus package.
“We are still discussing it. There are different commodity sectors under the ministry, and we are going to check with the industry players and different boards before coming up with a proposal,” she said after the launch of the government’s B20 biodiesel programme.
According to the Malaysian Palm Oil Board (MPOB), there were 255,615 independent smallholders in Malaysia as of December 2018 with a total area of 994,033 hectares, which accounts for 17% of the total oil palm-planted area of 5.85 million hectares.
Prime Minister Dr Mahathir Mohamad will announce the stimulus package on Feb 27 in a bid to counter the negative economic effects of Covid-19 by spurring spending, attracting investors and retaining public confidence in the country’s economy.
While the tourism and services sectors have been hit especially hard by the outbreak – the Malaysian Association of Tour and Travel Agents (Matta) recently said 95,000 hotel bookings had been cancelled – Kok said she was glad that palm oil prices have been relatively stable at between RM2,700 to RM2,800 per metric tonne.
Economists predicted between RM10 billion and RM15 billion would be needed to counter the slowdown in business because of the Covid-19 outbreak.
Earlier this month, Bank Negara Malaysia said Malaysia’s economy grew by 4.3% last year compared to 4.7% in 2018. Its governor Nor Shamsiah Mohd Yunus noted that the slight drop in the country’s economic growth was due to the disruptions in the commodities sector.
Touching on the B20 biodiesel programme which is expected to be rolled out in 3,400 petrol stations across the country by mid-2021, Kok said she did not foresee any problems for those making the switch from conventional diesel as no modifications would have to be made to their vehicles.
The fuel is a blend of 20% palm methyl ester and 80% petroleum diesel and is set at a standardised price of RM2.18 per litre.
The MPOB has been conducting research and development on biodiesel since 2008.
Indonesia introduced a mandatory B20 biodiesel programme in January 2016 and there had not been any engine-related complaints when using the greener fuel.
Closer to home, five city councils in Selangor – Ampang Jaya, Kajang, Selayang, Shah Alam and Subang – have tested B20 biodiesel on their vehicles, as have distributors such as Tan Chong Industrial Equipment and Hyundai Sime Darby Motors.
Kok said the primary industries ministry and MPOB had also been using the B20 biodiesel since last June without any adverse effects to their vehicles.
“The international trade and industry ministry has issued a directive that all cars imported into Malaysia starting from Jan 1 this year must be compliant with the B20 biodiesel, and the Japan Automobile Manufacturers Association (JAMA) has also said that older cars are already compliant with B20,” she said.
“MPOB has conducted many tests, and as far as we know, there have been no complaints.”