The Malaysian Insight

THERE is no reason for smallholders to be indebted to the Perikatan Nasional government for the rise in the price of oil palm fresh fruit bunches in recent weeks, the group said. 

They said the government played no role in the increase in the price, which was caused by market forces and the lack of production on the plantations. 

They told The Malaysian Insight that the government should not claim credit for their recent windfall, as it had not done anything to affect the global prices. 

“There is no reason to support Prime Minister Muhyiddin (Yassin) because the price of oil palm has gone up. It is not the outcome of the government’s efforts,” said smallholder Maznah Arsad. 

The purchase price of oil palm fresh fruit bunches has reached RM1,000 per metric tonne over the past few weeks, compared with RM250 to RM300 previously. In turn, this has increased the daily price of crude palm oil to RM4,070 per metric tonne as of June 10. 

This has increased the income of these smallholders to between RM5,000 to RM6,000 from a farm produce of 4ha, bringing a real relief to about 450,000 smallholders who depend on the commodity. 

Plantation and Commodities Minister Mohd Khairuddin Aman Razali had credited the government for the hike, which he said had benefited the smallholders. 

He also said the price hike was far different from the price of crude palm oil during the Pakatan Harapan (PH) administration, which once reached the lowest level of RM1,800 per metric tonne. 

However, for smallholders, the price hike had nothing to do with the actions of the government because they are aware that the price will come down when production increases later.

“It doesn’t matter how high the price of oil palm is, it is still not due to the government’s actions. 

“This increase is because the fruit yield is less, so that’s why the price goes up. (When) demand is high, supply is less, and so the price goes up. That’s normal in the economy. 

“This is not a government effort, there is no need to support the government (if the price goes up), when the production of oil palm fruit is high, the price will eventually fall,” said Maznah. 

Another smallholder, Ahmad Muzammil Borhan, said that the increase in the prices of crude palm oil and oil palm fresh fruit bunches were just a coincidence during the PN administration. 

A third generation settler of Felda Tenang, Johor, he said the price of crude palm oil was determined by the free market, based on demand and supply. 

“It is not because of the government that the price of oil palm has gone up. It just so happens that we are in the PN administration and the price of crude palm oil has gone up. 

“Similarly, during the PH administration back then, the price of crude palm oil plummeted. 

“The government cannot set the market price,” he added.

Govt should monitor price of cooking oil

The rise in crude oil prices, in turn, led to a sharp increase in bottled cooking oil for consumers. 

The latest retail price of unsubsidised 5kg palm oil now reaches up to RM30 compared with around RM22 previously. 

However, the price of a 1kg packet of oil, which is subsidised, remained unchanged at RM2.50. 

National Association of Smallholders Malaysia president Aliasak Ambia said the government should monitor the matter. 

He said, without control, the increase in the price of cooking oil would also affect smallholders. 

“The price of crude palm oil has gone up and smallholders have benefited. 

“The rising price of cooking oil is a businessman’s game, the government should control it and it should be checked,” he told The Malaysian Insight. 

He said the price increase was due to lack of production on plantations, including large estates while demand for palm oil remained constant. 

This is due to the overgrown oil palm trees, which produce less fruit, said Aliasak, who also rejected claims that the price increased due to the promotion of the use of palm oil. 

“The increase is due to lower oil palm fruit production in orchards and plantations. The oil palm fruit is declining. 

“Demand is normal, there is not much oil palm left. The government says it is due to its promotion of palm oil but in fact oil palm fruit production is lower now,” said Aliasak. 

He added that the current price should be maintained as it helped improve the living standards of smallholders.

However, according to him, middlemen were still influential in determining the price of the commodity.

“The price should have gone up a long time ago but it did not, thanks to the middlemen. Now the smallholders are grateful. 

“If it keeps soaring like this, it’s good,” he said. – June 18, 2021.