Malaysia must be one step ahead of the price volatility in the palm oil market to protect the country’s source of income, as well as the wellbeing of smallholders, former Council of Eminent Persons chairperson Daim Zainuddin said today.
Since Malaysia is a small country, Daim said, with 80 percent of its crude palm oil and palm oil-based products exported, it is vital for the country to team up with the world's largest producer Indonesia to tackle the challenges from the European Union and the US-China trade dispute.
"We must work together with Indonesia, because Malaysia alone is a small nation. Together with Indonesia, home to 264 million people, we can fight the battle together," he told Bernama.
Noting that the price of crude palm oil depends on market forces, he said: "This is normal even during my time. So it’s not something new, but now, with the ongoing threats coming from the EU and the US-China trade dispute, we need to be smart."
Daim said while it is good that the US and China are about to wrap up their trade talks, the government and industry players must also be alert to what will transpire from the deals.
In March last year, US President Donald Trump imposed tariffs of up to 25 percent on Chinese imported goods, with Beijing retaliating with a 25 percent tariff on US$110 billion (RM454 billion) worth of US goods – including soybean, the US' largest agricultural export.
Daim said that this opened up more opportunities for other edible oils, including palm oil.
"But don’t react when it’s too late, because it might affect our market and the smallholders."
China is the third largest buyer of Malaysian crude palm oil, after India and the EU.
Following the signing of the new deal on the East Coast Rail Link project on Monday, Prime Minister Dr Mahathir Mohamad said Putrajaya will take advantage of the agreement and implore Beijing to import more palm oil.
Daim, the former finance minister, also urged youths to venture into modern agriculture using the latest technologies.
"There are crops that we can plant using science and technology, and they can either grow vegetables, fruits or they can also be in the fisheries industry. They can consider this to be their full-time or part-time job.
"I went to Sabah recently where I visited one entrepreneur’s farm. He has about 5,000 cows, fish ponds, as well as pineapple and durian plantations," he said.
"I asked him how much revenue he earned. He did not answer, but I'm assuming he must be earning about RM500 million yearly.
"I believe we can also do that here (in the peninsula), but the most important thing is that we need to ensure that we produce good quality products.
"We also need the full commitment from the government on modern farming," he added.