US Tariffs Not Affecting Malaysian Oil Palm Input Costs – Johari

KUALA LUMPUR, Nov 13 (Bernama) -- The Ministry of Plantation and Commodities (MPC) said the tariffs imposed by the United States have not affected the input costs of oil palm plantations in Malaysia.

Its Minister Datuk Seri Johari Abdul Ghani said this was because most of the inputs used in oil palm planting activities were obtained domestically.

“The tariffs have nothing to do with our oil palm plantations because most of the inputs are sourced domestically.

“Only some chemicals and fertilisers, including nitrogen, phosphorus and potassium (NPK) fertilisers, are imported, but these do not go through the United States,” he said during a question and answer session in the Dewan Rakyat today.

He said this in reply to a supplementary question from Datuk Seri Ismail Abd Muttalib (PN-Maran) regarding the impact of increased agricultural input costs due to the Agreement on Reciprocal Trade (ART) between Malaysia and the US.

Meanwhile, Johari said the ministry was also formulating a new scheme to help defray the higher cost of oil palm replanting previously funded by the government to be implemented next year.

“Smallholders often have difficulty getting loans. So I will try to meet the bankers to see if the money doesn't come from the government, perhaps the banks can help these smallholders to obtain loans by mortgaging their farms, and I would try to ask the government for an interest subsidy.”

“If the interest is high, the government will try to subsidise four per cent,” he said.

He said the MPC was still in the process of negotiating with the Ministry of Finance regarding the granting of the interest subsidy.

“If possible, we will launch a new scheme other than the one we made hybrid,” he said.

The government has provided allocations under the Smallholder Oil Palm Replanting Financing Incentive Scheme (TSPKS 2.0) which is a hybrid assistance of 50 per cent grant and 50 per cent loan.

A total of RM100 million has been provided to MPC for 2024 and a total of RM50 million for 2025.

Johari was replying a supplementary question from Datuk Dr Richard Rapu @ Aman Begri (GPS-Betong) regarding the government's measures to assist smallholders to replant oil palms in the next five to 10 years.

“The country would lose almost RM7 billion in export revenue if it does not implement the replanting of oil palm of over 25 years old. 

“Malaysia’s oil palm replanting rate in 2024 was around 2.0 per cent, which is still low compared to the targeted oil palm replanting rate of four to five per cent per year,” he said.

-- BERNAMA