GOVT SHOULD INVEST MORE RESOURCES IN G2G ENGAGEMENTS TO ADDRESS MARKET ACCESS, PALM OIL ASSOCIATIONS

KUALA LUMPUR, March 8  -- The government should invest more resources in government-to-government engagements (G2G) to address market access related issues which include sustained and increasing anti-palm oil campaigns by western environmental non-governmental organisations, said associations representing the interests of the Malaysian palm oil supply chain.

In a joint statement today, they said the engagement should also cover the no-palm oil labelling campaigns.

“Added to this list are the discriminatory trade barriers introduced by foreign governments, including the US Customs and Border Protection (US CBP) ban on import of palm oil produced by two Malaysian companies, and lastly the unrealistic expectations and compliance requirements, and ever-changing sustainability goals and practices.

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“This includes food safety requirements in relation to 3-monochloropropane diol (3-MCPD) and glycidyl fatty acid esters (GE),” they said in a statement.

The joint statement was issued by 12 associations including the Malaysian Palm Oil Association, Malaysian Estate Owners’ Association, National Association of Smallholders, Malayan Agricultural Producers Association, Sarawak Oil Palm Plantation Owners Association and Palm Oil Millers Association.

The associations also appealed to the government to engage with the industry and review the present taxation structure imposed on growers covering the Windfall Profit Levy (WPL), Malaysian Palm Oil Board (MPOB) Cess and State sales taxes (SST) in Sabah and Sarawak.

“On the WPL, we seek the abolishment of the Windfall Profit Levy because it is eminently unfair. We believe the true test of windfall profit is return on investment, rather than profit margin.

“However, if it is not to be abolished, we seek the consideration of the government to review the threshold levels currently at RM2,500 per tonne crude palm oil (CPO) in Peninsular Malaysia and RM3,000 in Sabah and Sarawak,” the associations said.

For a start, the revision of threshold levels to RM3,500 and RM4,000 respectively would have closer semblance to the notion of windfall profit.

In addition, portions of the WPL from the growers should also be channelled back to the palm oil industry as reinvestment to ensure the sustainability and competitiveness of the industry.

On the MPOB cess, they appealed that growers will not be further burdened with additional cess and the industry would also like to appeal to the government to re-initiate the restructuring exercise of MPOB's operations towards becoming more efficient in keeping with MPOB's original objectives and purpose.

Meanwhile on the SST, they appealed for both Sarawak and Sabah state governments to welcome engagements with the industry to review their respective SST.

They said it is becoming ever more difficult for Malaysian palm oil to maintain its competitiveness due to agriculture being one of the most protected and heavily subsidised industries in many parts of the world.

“Trade distorting measures in the form of agriculture production subsidies, export assistance programmes, import quotas etc and anti-palm oil campaigns continue to challenge the competitiveness and sustainability of palm oil,” they said. 

-- BERNAMA