ISP: Weak CPO prices hurting 400,000 planters

KUALA LUMPUR: Low palm oil prices are causing some 400,000 oil palm planters severe financial burden as they pay up to RM30 billion a year in taxes to the federal and state governments of Sabah and Sarawak.

Yesterday, the third month benchmark palm oil futures on the Malaysian Derivatives Exchange closed RM10 lower at RM2,173 per tonne.

"In times of low pricing, oil palm planters' disposable income are slashed. This slows down replanting and value adding activities," said Incorporated Society of Planters (ISP) director Kamal Milatu. 

"Professional bodies like us also feel the trickle down impact because small planters don't have the budget to participate in our knowledge sharing programmes," he said, adding that when palm oil prices were high, ISP could garner more than 1,000 delegates to its conferences and hold more training sessions.

Kamal was speaking to reporters yesterday after giving a preview of the International Planters Conference 2015 which slated for June 8-10 at the Putra World Trade Centre in Kuala Lumpur. Also present were ISP chairman Daud Amatzin and ISP chief executive officer Azizan Abdullah.

Apart from crude palm oil (CPO) export duty and windfall tax, Azizan said oil palm planters pay the 25 per cent corporate tax, cess amounting to RM13 per tonne of CPO, as well as a 7.5 per cent and 5 per cent sales tax in Sabah and Sarawak, respectively.

Compared with other businesses that just pay 25 per cent of corporate tax, oil palm planters are seen the most heavily taxed in the country. 

“For every RM1 planters earn, around 40 sen goes to the federal and state governments in taxes. That works out to be RM25 billion to RM30 billion a year,” Azizan said.

Daud said ISP members are saddened by bizzare lies on the Internet concerning planters' professionalism.

"Claims such as forest the size of 300 football fields are being destroyed per hour and at least 1,500 orangutans were killed by planters are not true. These allegations are defamatory and impinge on planters' professionalism," he said.

Daud reiterated that oil palm planters in generating sustained dividends for investors, balance the needs of 'People, Planet and Profits' by adhering to Malaysia's environmental and labour laws.

Malaysia's oil palm plantations span across 5.3 million hectares.

On green activists' sweeping allegation that monoculture oil palms are unable to support wildlife diversity, making the estates sterile, Daud said: "That is not true. Shrubs, ferns, fungi and herbs, monkeys, birds, wild fowls, squirrels, rats and snakes flourish in oil palm plantations."

Plants, mammals, insects, reptiles and birds have adapted to the oil palm ecosystem. Oil palms generate oxygen which the developed part of the country breathes, fulfilling many of the rainforest functions, he said.