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KUALA LUMPUR: With the price of crude palm oil (CPO) currently trading around RM3,000 per tonne, Sabah will potentially lose RM900 million per month in revenue following the implementation of new standard operating procedures (SOPs) to curb the rise of the pandemic Covid-19.
The Sabah state government recently announced that new standard operating procedures for the oil palm sector in the state would include restriction to only 50 percent of its workforce capacity in attendance, and shorter working hours. every day from 6 am to 6 pm for your processing supply chain.
The Malaysian Property Owners Association (MEOA) estimates that if the entire oil palm supply chain in Sabah is restricted according to new regulations, the state could see CPO production drop by as much as 300,000 tons per month. , compared to the current maximum. harvest season.
“At favorable CPO prices prevailing close to RM3,000 per ton, the estimated loss of revenue can be a staggering RM900 million per month or RM30 million per day and this loss has not accounted for palm kernel losses, “losses,” it said in a statement.
He noted that since 2005, the state government has been collecting a 7.5 percent sales tax on crude palm oil from oil palm stakeholders and, in recent years, the total sales tax. average that can be charged for crude palm oil for the state coffers could amount to between RM800 million and RM1 billion.
“The new standard operating procedures now in place will also affect the state’s sales tax revenue and, using the previous potential revenue loss of RM 900 million per month from CPO, will also translate into a loss of RM 68 million. RM per month in the Sabah sales tax collection, ”said the association.
He said the potential loss of tax revenue could have gone a long way toward mitigating the current Covid-19 pandemic in Sabah.
“The oil palm sector is already committed to continuing to adhere strictly to the current SOPs.
“It is not necessary for the plantation sector to adhere to the regulation of 50 percent labor present when the social distancing by law of one meter, the employment relationship is one worker per seven hectares and the distance between each palm is nine meters in oil palm plantation, they are all in place.
MEOA emphasized that there is a uniqueness in oil palm plantations that are isolated and widely spread mainly in rural landscapes, and where social distancing is already the nature of work and the norm of their operations.
“We call on the Sabah state government to immediately review and lift the restrictions on the newly implemented standard operating procedures that have included the oil palm sector.
“Otherwise, not only will there be no control over the 220,000 plantation workers, the social, economic and political implications can be devastating. The new standard operating procedures would make both small producers and medium-sized producers in the state’s oil palm sector suffer most of these losses during this period, ”he added.
The 2019 Malaysian Palm Oil Board statistics revealed that Sabah’s palm oil mill sector processed 24 million tonnes of fresh fruit bunches derived from small farmers and planters, which produced 5.04 million tonnes. of crude palm oil and 1.15 million tons of palm kernels. -Called
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