Additional RM2 cess based on CPO price trend - MPOB

KUALA LUMPUR, March 12  -- The additional RM2 cess imposed on the manufacturers of crude palm oil and crude palm kernel oil is in line with the current uptrend performance of the commodity which is trading above RM4,000 per tonne, says Malaysian Palm Oil Board (MPOB).

“CPO price on March 9, 2021 surged to RM4,022.50 per tonne, its highest since March 4th, 2018 and is expected to remain stable due to positive market sentiment, declining stock and increasing exports,” it said in a statement.

MPOB director-general Dr Ahmad Parveez Hj Ghulam Kadir said the government agreed with the industry’s proposal to use the additional cess collection to support the establishment of the Mechanisation and Automation Research Consortium of Oil Palm (MARCOP).

He said this in response to a news report quoting the Sarawak Oil Palm Plantation Owners Association’s (SOPPOA) view regarding the newly-gazetted Malaysian Palm Oil Board (Cess) (Amendment) (No 2) Order 2021 which came into effect on March 1.

In the news report published by a local daily, SOPPOA said the newly increased cess, to RM16 would cause further hardship to the palm oil industry in Sarawak amidst the economic downturn and Covid-19 pandemic.

Ahmad Parveez explained that the additional cess would be used to further improve the technology and adoption of mechanisation to optimise the operational efficiency and harvesting of oil palm fruit as well as address the issue of labour shortage in the plantation sector.

“It  clearly shows that the government is concerned about issues related to labour shortage faced by the nation’s oil palm industry,” he said.

In addition to that, he said a total of RM30 million from the cess collection will complement the allocation of RM30 million provided by the government through matching grants to enhance mechanisation and automation in the commodity sector as announced in Budget 2021.

“MPOB has been using the cess collection to fund its research and operations including that in Sarawak, promotional activities, implementation of the Malaysian Sustainable Palm Oil (MSPO) certification and other activities which focus and support the competitiveness of the country’s oil palm industry globally.

“We have also been utilising the cess collection to fund the industry’s upstream and downstream research and related projects which include agronomy research and oil palm cultivation in peat land in Sarawak,” he said.

He added that the MPOB has invested more than RM50 million on the development of two research stations in Sessang and Belaga, research grants on greenhouse gas emission, integration projects in oil palm plantations and various research projects undertaken in the state.

MPOB points out that it is continuously collaborating with industry players to prioritise research activities in line with the needs of the palm oil industry and to address global challenges.

 This includes the establishment of a working committee on Research & Development by MPOB and SOPPOA in 2014 which focuses on issues such as pests and diseases management especially on oil palm planted on peat.

-- BERNAMA