Malaysia

Sabah palm oil players allowed to operate within lockdown

RM1.7 bil revenue loss in one month if industry completely shut down, warn palm oil bodies

· Published on 26 Jan 2021 8:29PM

Sabah palm oil players allowed to operate within lockdown
The Malaysian Palm Oil Association and the Malaysian Estate Owners Association says that even though Sabah's approach to mitigating the virus’ spread includes a 30-day voluntary lockdown to assist screening of workers, operations will still continue. – File pic, January 26, 2021

by The Vibes Team

KOTA KINABALU – Palm oil activities must continue in Sabah with strict standard operating procedures in place despite Covid-19 infections being detected in the estates, said palm oil bodies.

The Malaysian Palm Oil Association (MPOA) and the Malaysian Estate Owners Association (MEOA) said in a joint statement that an agreement has been reached between them and the state government to continue operations but with strict compliance to the SOPs, instead of a total closure of the plantations. 

They said that even though the state’s approach to mitigating the virus’ spread includes a 30-day voluntary lockdown to assist screening of workers, operations will still continue.

Sabah Chief Minister Datuk Seri Hajiji Noor had said yesterday that several plantations with active infections had been ordered by the Health Ministry to shut down.

Six clusters have been identified, involving estate workers and their close contacts, over the past week ending January 24.

Hajiji had said that plantations must immediately cease operations upon detecting positive cases, and that their reopening will depend on the ministry’s assessment.

“Malaysia’s largest palm oil producing state Sabah will not impose a shutdown of plantation operations,” said the statement by MPOA and MEOA today.

“The Sabah state government was wisely able to comprehend that any shutdowns or drastic changes in policies can adversely affect the Sabah palm oil industry, impacting the state’s economy,” it added.

The oil palm planted area in Sabah covers over 1.544 million hectares, with the landbank owned by both MPOA and MEOA representing 43% of the area.

The palm oil sector’s mid-stream involves 132 palm oil mills and 12 palm kernel plants, and its downstream 11 refineries. 

The associations warned that a complete shutdown of the oil palm plantation sector would cause significant losses for Sabah and its people, and have socio-economic consequences.

“Crude palm oil (CPO) prices are now hovering favourably at around RM3,500 per tonne and planters will lose the opportunity to recoup their investments from earlier years of depressed prices.

“The state itself will also lose out on sales tax collection for its treasury. Sabah can potentially produce about five million tonnes of CPO per year.”

With the prevailing Sabah sales tax of 7.5% set against CPO average price at RM3,500 per tonne for 2021, the total sales tax collectable for state coffers can amount to over RM1.3 billion, the two bodies said.

It said planters will forgo about RM1.7 billion in CPO and palm kernel revenue in a single month in the event of a complete shutdown; this excludes other spin-offs throughout the supply chain.

The bodies said daily operations in the oil palm plantation are already confined to permanent locations in large landscapes, where movement control of both plantation workers and outsiders is now enforced.

By virtue of the nature of work activities in the plantation, the workers are by default well-distanced from each other, it said.

“Thus, it is safe for the workers to be out in the fields working.

“A shutdown, however, will encourage the workers staying at their quarters to mingle and group together, which potentially puts themselves and all others in the plantation community at higher risk,” it said. – The Vibes, January 26, 2021

Related News

Opinion / 1d

The Malaysia Agreement 1963: Grievances and expectations in Sabah and Sarawak

Malaysia / 6d

Budget 2027: Sabah, Sarawak to receive RM34.9b in federal allocations next year

Events / 1w

Sarawak and Sabah play key roles in weathering climate change

Malaysia / 2w

Address security concerns and let concert proceed – former Sabah CM

Malaysia / 4w

A message from our publisher and chairman

Malaysia / 1mth

Sabah leaders condemn priest and nun joke at UMNO PAU

Spotlight

Education

Fadhlina: Numerous factors considered before any decision made to close schools

Malaysia

Traffic congestion in Bandar Sunway persists into the afternoon

Malaysia

Two people allegedly stabbed in Kepong attack, student faces 20 years in jail

Malaysia

KLIA steps up K9 patrols at peak hours after security incidents

Malaysia

Customs seizes RM162m in drugs, including 460kg hidden in cemetery hut

Malaysia

Fourteen men charged over teenager’s death after alleged two-day ordeal

Malaysia

Instant billionaire? Bank customer finds RM1 billion mistakenly credited to account

Malaysia

Irene Sofiya murder: Accused’s family to take legal action over fake social media posts

World

Indonesia records 277,075 respiratory infections as forest fires fuel haze crisis

You may be interested

Malaysia

Online activity and legal gaps hamper JAWI action against deviant teachings

Malaysia

Irene Sofiya murder: Accused’s family to take legal action over fake social media posts

Malaysia

Global fuel shock drives electricity costs, but 8 million Malaysian households remain protected - DPM II

Malaysia

Zara Qairina inquest: Investigating officer says final findings showed no suspicious circumstances

Malaysia

Man kidnapped, tortured, and killed following misunderstanding

Malaysia

Schools to remain open in 3 states and Putrajaya as haze hits unhealthy levels

Malaysia

Court of Appeal overturns RM1.1m damages award to Ivana Smit’s mother

Malaysia

Parents told to check Malaysian Conformity mark on squishy toys before purchase