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SOPPOA calls for cess payment to fund R&D in state

Monday, 1 March 2021

The palm oil industry in Sarawak is disappointed by the recently gazette Malaysian Palm Oil Board (Cess) (Amendment) (No.2) Order 2021 effective on 1st March 2021, a 14.3% increase cess payment from RM14 to RM16, during the economic downturn and Covid pandemic causing further hardship to the palm oil industry in Sarawak. Low yields, low OER, high production cost and severe shortage of harvesters had retarded the growth and development of the industry here.

“Foremost, the palm oil industry was not consulted on the additional cess increase which will add to cost of production,” stated a spokesperson from SOPPOA (Sarawak Oil Palm Plantation Owners Association). The palm oil industry in Sarawak expressed surprised and regret the decision by Ministry of Plantation Industries Malaysia to impose the additional cess on the industry which further burdens the industry here.

In view of the low productivity for oil palm in Sarawak, SOPPOA propose that the MPOB cess collected from Sarawak be channeled back to Sarawak for oil palm research and development for upstream as well as downstream in research institutions like TROPI, local and foreign universities in Sarawak. Sarawak’s palm oil yields is low as compared to those in peninsula Malaysia and Sabah and so it is only right that more funds be allocated by MPOB to conduct research and development in Sarawak to increase yields and resolve planters’ issues. The unique conditions of peat soil, high rainfall and P&D problems in Sarawak contributed to the low yield of oil palms and need more research and technology development to increase productivity to levels to sustain the sector business.

“It is therefore timely that the government consider the proposal for the MPOB cess collected from Sarawak be channeled back to Sarawak for immediate use to enable the palm oil industry in Sarawak to resolve such issues to cushion further deterioration of the low yield and low OER, key factors in CPO production in the state. Sarawak as the largest single planted area in Malaysia, it is onus of the government to allocate sufficient funds from MPOB cess collected from the plantation sector in Sarawak for R&D activities to increase yields, sustain and produce good quality for export purposes and also to increase number of expertise and scientists in Sarawak for such activities,” said the SOPPOA spokesperson.