PUTRAJAYA (Jan 26): Malaysia will hold a meeting with the Indonesian government to discuss the republic’s intention to have its own crude palm oil (CPO) benchmark price, said Deputy Prime Minister and Plantation and Commodities Minister Datuk Seri Fadillah Yusof.
He said the matter needs to be discussed jointly, as Indonesia’s plans will affect the entire oil palm industry chain, not just Malaysia, but also globally.
The deputy prime minister said the meeting to resolve this matter beneficially for all parties had been proposed to take place in the second week of February.
“A discussion must be held before any decision on price setting is taken for the benefit of the plantation sector in both nations,” he said at a press conference after attending the Ministry of Plantation and Commodities’ New Year Mandate ceremony here on Thursday (Jan 26).
Indonesian Trade Minister Zulkifli Hasan reportedly said the republic plans to establish its CPO benchmark price before June, and will no longer have to depend on Kuala Lumpur.
Indonesia is the world’s largest palm oil producer, with almost 50 million tonnes of CPO annually.
On Jan 12, Malaysia Palm Oil Board director general Datuk Dr Ahmad Parveez Ghulam Kadir said the CPO price this year is expected to fall between RM4,000 and RM4,200 per tonne, compared with RM5,087.50 a tonne in 2022.
Fadillah said the issue of the European Union’s ban and trade barriers imposed on palm products would also be discussed when the two countries meet.
He said the agri-commodity sector achieved RM268.2 billion in trade value last year, while the trade balance stood at RM146.5 billion.
“Agri-commodity product export revenue reached RM207.3 billion or 13.4% of the country’s total export revenue,” he added.
Fadillah said he is confident that this year’s agri-commodity trade performance would remain positive, despite a 1.1% drop last year compared to 2021.
“The agri-commodity sector contributed RM61.3 billion, or 5.5% of Malaysia’s gross domestic product in January to September 2022,” he said.
Meanwhile, Fadillah said the agri-commodity industry still needs around 63,000 foreign workers, primarily for the oil palm sector.
He said labour shortages in the oil palm sector had severely impacted productivity in the industry, and resulted in an estimated RM20 billion loss of revenue last year.