New product categories
Moving activities further downstream would also increase the demand for CPO, and the entire industry would benefit, the Minister said.
“When the CPO price is high, the upstream segment will generate the bulk of profits, but when prices are low, planters tend to benefit from the downstream segment. This is because input costs are lower and planters will gain from end-products,” he said.
“Companies that have strength in upstream as well as downstream [activities would] be able to leverage [on the situation], whether CPO price is high or low.”
Palm oil derivatives are found in various daily products – from toothpaste to shampoo and food to health items, as well as in biodiesel.
Under the 10th Malaysia Plan (10MP), the government had set aside RM416 million in grants for commercialisation projects, while the private sector committed RM2.9 billion in investments.
The projects utilising these grants are in various stages of implementation. Under the segment allocated for commercialisation projects, clinical trials have been implemented in five countries.
Datuk Seri Mah cited a successful project initiated in December 2014 in China, in collaboration with Lanzhou University in Longxi District.
Under this, students were given biscuits made with palm oil derivatives, to enrich the carotene and Vitamin A content. The programme has helped reduce malnutrition among the students, as well as resulted in a significant decline in eye disease.
Since the 10MP, the government has emphasised five additional product categories for industry players to explore:
Malaysia has close to 1 million smallholders involved in commodities, with 568,354 of them in the palm oil industry and farming 40% of the oil palm land.
Source: Star Online, Oct 31, 2016
This is an edited version of the article.
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