MALAYSIA’S total exports in 2018 was expanding by 6.7% to reach a value of RM998.01bil, compared with RM934.92bil in 2017. The growth was largely due to the electrical and electronic sectors which contributed 38.2%, or RM380.81bil, rising by 11% in 2018.
Manufactured products also contributed to the growth in exports for 2018, such as chemicals and nonmetallic minerals products, which grew by 22.5% and 21% respectively.
While almost all sectors showed positive growth in exports in 2018, the export value of palm oil and palm oil-based products shrank drastically from RM54.02bil in 2017 to RM44.70bil in 2018.
The slump was due to many reasons. The decisive action by the European Union countries to ban palm oil and the huge expansion of palm oil plantations in Indonesia have created a lower demand and oversupply of such products worldwide.
Certainly, the Malaysian government through Primary Industries Ministry, MITI (International Trade and Industry Ministry) and Wisma Putra are currently struggling hard to manage the headwind by clarifying the misperception of palm oil created by anti-palm oil campaigns and rolling out the B10 biodiesel programme nationwide to help stabilise palm oil prices.
Such efforts, however, are not enough, as it is quite difficult to improve the global demand and price of palm oil without a strong pact and mutual understanding among palm oil exporters.
Even though the Council of Palm Oil Producing Countries (CPOPC) was set up in 2015 to safeguard the interest of palm oil-producing countries, new policies need to be developed and enforced by the council to address those aforementioned issues wisely.
This includes regulating the price and production of palm oil as well as monitoring the expansion of palm oil plantations to ensure the stabilisation of palm oil markets to secure an efficient, economic and regular supply of palm oil to consumers globally.
In addition, critical issues regarding deforestation and the United Nations’ Sustainable Development Goals should be taken into account as well to ensure the palm oil industry will remain relevant and resilient.
Since Malaysia was appointed as the chairman of the CPOPC this year, it is hoped that we can raise up our voice and highlight these matters seriously during the next meeting, scheduled to be held on Feb 28 in Jakarta.
AHMAD SHAHIR ABDUL AZIZ
Graduate School of Business
Universiti Sains Malaysia
Read more at https://www.thestar.com.my/opinion/letters/2019/02/04/new-regulation-is-required-to-regulate-palm-oil-production-and-price/#1BJDUYSyApvVYlQq.99