Friday, September 19, 2008

Malaysia Fertilizers Price Uncontrolled

Malaysia produce fertilizers but bulk of it are exported to other nations. Little are distributed locally.

To make matter worst, cost of shipping resulted in the price of fertilizers in Malaysia to shoot up to almost an uncontrolled level. If the big plantation companies and smallholders are whining about the price of fertilizers getting too expensive, the poor farmers in the rural areas are even most adversely affected, especially those from Sabah and Sarawak.

From the DailyExpress Sabah

Fertiliser price major worry

Kota Kinabalu: The price of fertiliser in the State will continue to greatly affect the profitability of Crude Palm Oil (CPO) in the future and there is very little the smallholders, people or Government can do about it.

Chief Executive Officer (CEO) of POIC Sabah Sdn Bhd, Dr Pang Teck Wai said this is because the cost of shipping the material into the State is high.

Hence, while palm oil will continue to be Sabah's single largest sector, they should also look into expanding the rubber industry and other agriculture crops.

"Oil palm will definitely still have a very good future but it is just one of the crops," he said when presenting a talk on "Current Economic Scenarios: The POIC Perspective" at Sabah Trade Centre, Thursday.

At the talk, an oil palm smallholder, Leong, said it is very unlikely the price of fertiliser would go down because the bulk of the fertilisers is exported to other countries while only a small amount is available in Sabah.

Pang, on the other hand, said if they abolish the State sales tax on CPO, it would have an impact on Sabah's development.

Last year, Sabah collected RM997 million from CPO sales tax, he said. The Government has taken into consideration the sales tax on smallholders who had complained they could not afford to pay.

"At the Federal level, anyone with less than 100 hectares or 40 acres will not be subjected to the 15 per cent FFB COSS tax," he said.

However, the State Government has yet to implement it in Sabah.

In the Federal Government, he said the windfall tax was changed to FFB COSS tax on June 16 this year, after taking into account the smallholders.

On other developments, Pang said Sabah still has a long way to go to attain some level of economic stability through industrial diversification and transformation.

According to him, there are simply many issues to overcome such as dependence on one sector, high cost of doing business, dependence on imports from Peninsular Malaysia, difficulties in diversification and transforming Sabah's economy.

He foresees that in the next two years, the world, national and state economy would see a slowdown. Sabah's economic growth next year is expected to be less than six per cent.

He said there would be also complications of stagflation and political uncertainty. With all the problems looming ahead, Pang said the slowdown could be offset through State and Federal government spending.

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