Crude palm oil prices are cyclical, says KLK CEO
KUALA LUMPUR (November 10): Despite the recent surge in crude palm oil (CPO) prices, Tan Sri Lee Oi Hian, CEO of Kuala Lumpur Kepong Bhd (KLK) Group, said CPO prices are cyclical and depend on climate change.
“Commodities are cyclical. We probably forgot that palm oil prices were RM2,000 at the start of last year; everyone forgot it could be 2,000 RM. Now everyone thinks only of RM4,000 and RM 5,000.
“Palm oil is cyclical, it depends on weather fluctuations. We also compete with oilseeds.
“But the advantage of palm oil is that it is very productive. Compared to oilseeds, we (palm oil) meet over 40% of the demand,” Lee said at the time. of the Invest Malaysia 2021 Series 3: Sustainable Growth event which took place almost on Wednesday (November 10).
He added: “This is our advantage. But some non-governmental organizations and activists cast a very negative and unfair image of palm oil.
Meanwhile, Lee said Indonesia has a biodiesel policy that will help the country stabilize CPO prices.
On the other hand, he noted that greenfield expansion is very difficult for the plantation sector in the country as the sector is expected to meet the requirements of the Round Table on Sustainable Palm Oil (RSPO).
“I think the plantation sector is more dependent on land and productivity growth. We (KLK) have a long way to go, maybe 20-25% productivity growth – that’s the way to be continued, “he added.
At the midday break on Wednesday, KLK shares settled 18 sen or 0.87% down to RM20.52, with a market cap of RM22.18 billion.
“Increased Windfall Profit Levy for East Malaysia is Unfair”
Meanwhile, commenting on the 2022 budget regarding the government’s proposal to increase the windfall profit levy, especially in Sabah and Sarawak, from 1.5% to 3%, Lee said the tax is unfair.
“Although the government has raised the windfall levy threshold for both states, we know they are not happy with the 3% tax hike,” he added.
Earlier, palm oil producers in Sabah and Sarawak said the tax doubling was unfair.
In an Oct.31 statement, the planters said the 1.5% tax for East Malaysia was implemented by the former government because growers in Sarawak and Sabah also faced a tax of CPO sale of 5% and 7.5% respectively after a threshold of RM1,500 per ton. No other state in Malaysia has this tax, they say.
“With the doubling of the levy from 1.5% to 3%, the sense of fairness seems to have been suppressed from the states of East Malaysia by the current government and [there is] a sense of using the states of East Malaysia to subsidize lost opportunities in the West. It gives new meaning to ‘Keluarga Malaysia’, ”the planters said.
The statement was issued jointly by the Sarawak Oil Palm Plantation Owners Association, the East Malaysia Planters’ Association, the Dayak Oil Palm Planters Association, the Chinese Tawau Chamber of Commerce, the Tawau Agricultural Association, the Malaysian Landowners Association. land and the Chinese Chamber. of Commerce Lahad Datu. Collectively, they are known as the East Malaysia Oil Palm Solidarity Group or EMOPSG.