IT seems that the economic growth for the country this year looks promising with the rise of commodity prices.

For instance, the spike in crude palm oil (CPO), which continues to trade above RM3,100 per tonne, serves as a good start for 2020.

Furthermore, the recent jump in crude oil prices spells good news for Malaysia as it increases the government’s coffers, thus allowing the country to increase spending.

Nonetheless, this situation is likely to be temporary. The first reason is due to the move by Indonesia, Malaysia and Thailand to increase the blends of diesel and fatty acid methyl esters as part of their mandatory biodiesel policy.

More importantly, the strong buying interest by China and India also led to the price hike, especially after New Delhi slashed import taxes on crude and refined palm oil from Southeast Asia.

Meanwhile, crude oil rose mainly after the surprise attacks on Saudi oil facilities last September followed by the fresh round of turmoil in the Middle East after the assassination of an Iranian general. The trade sanctions against Venezuela, which led to drastic cuts in the country’s oil production, are another factor.

In view of this, it is worthy to note that the current uptrend of commodity prices is a result of global factors.

From this standpoint, the country should get cracking with alternative plans amid external headwinds and uncertainty by diversifying business activities.

Looking forward, the existing business activity should be diversified into untapped growth. For example, it is timely for the plantation sector to explore the development of the bamboo industry instead of relying on the palm oil sector since Malaysia only exported RM9.9 million worth of bamboo products last year compared with the global market value of RM288.2 billion.

This presents a huge opportunity to tap a growing market. – January 8, 2020.

* Dr Ahmad Shahir Abdul Aziz is an investment promotion manager at InvestPerak.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.