MALAYSIA must be one step ahead in planning ways to react to price volatility in the palm oil market to protect the country’s source of income and wellbeing of smallholders, said Council of Eminent Persons chairman Daim Zainuddin.

He said since Malaysia is a small country and 80% of its crude palm oil (CPO) and palm oil-based products are exported, it is vital for the country to team up with Indonesia, especially in tackling the challenges from the European Union and the US-China trade dispute.

Neighbouring Indonesia is the world’s largest producer of the commodity.

“We must work together with Indonesia because Malaysia alone is a small nation (with 31 million people as at 2017) and together with Indonesia, home to 264 million people, we can fight the battle together.”

Noting that the price of CPO depends on the 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 a good news that the US and China are about to wrap up their trade talks, the Malaysian government, its agencies and industry players must be alert on what has transpired during the deals.

In March last year, US President Donald Trump imposed tariffs of up to 25% on Chinese imported goods and likewise the Chinese government retaliated by imposing tariffs of 25% on US$110 billion (RM454.6 billion) worth of goods, including soybean, US’ most important agricultural export crop.

This has opened up opportunities to the other edible oils, including palm oil.

“But don’t react when it’s too late, because it might affect our market and the smallholders,” Daim said.

China is the third largest buyer of Malaysian CPO after India and the EU.

But 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 work out the purchase of palm oil from China.

Meanwhile, Daim, who was former finance minister, urged youths to venture into modern agriculture using the latest technology.

“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 fishery industry. They can consider this to be their full-time or part-time job.

“I went to Sabah recently where I’d visited one entrepreneur’s farm. He has about 5,000 cows, fish ponds, as well as pineapple and durian plantations. 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 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 said. – Bernama, April 21, 2019