(Source: New Straits Times)By Ooi Tee Ching
MALAYSIA'S 200,000-odd oil palm planters, initially forecast to spend
more than RM5 billion on 3.5 million tonnes of imported fertiliser
this year, have collectively agreed to reduce purchases in the next
six months.
Oil palm plantations consume more than 75 per cent of the nation's
fertiliser imports.
"We're considering not applying fertiliser for the next six months to
cut cost if fertiliser prices do not come down. Fertiliser is still
two times more costly than at the beginning of the year," said
Malaysian Palm Oil Association (MPOA) chairman Datuk Azhar Abdul
Hamid, who is also Sime Darby Bhd executive vice-president of the
plantation and agribusiness division.
He was speaking to reporters after a meeting with Malaysian Estate
Owners Association (MEOA) president Boon Weng Siew and the Malaysian
Palm Oil Board (MPOB) chairman Datuk Sabri Ahmad.
MEOA's Boon said fertiliser importers' recent pledge to cut prices by
15 per cent is not justified.
"Fertiliser suppliers should drop prices by 50 per cent, considering
that international crude oil have come down by more than 65 per cent
from its high of US$147.47 (about RM535) per barrel in July," he said.
Also present at the press conference were Felda Holdings Bhd group
managing director Datuk Mohd Bakke Salleh, IOI Corp Bhd executive
chairman Tan Sri Lee Shin Cheng and Kuala Lumpur Kepong Bhd (KLK)
chairman Datuk Seri Lee Oi Hian.
Last year, Malaysia's oil palm planters spent RM2.6 billion on 3.4
million tonnes of imported fertilisers.
MPOB has so far collected RM500 million in cess from oil palm
planters. This money will be used to replant 200,000ha of land and
stabilise biodiesel prices when the government implements the B5
mandate effective February 2009.
Oil palm planters are also proposing to the government that national
power firm Tenaga Nasional Bhd uses palm oil feedstock for its
diesel-fuelled power plants in Sabah.
Although yesterday's sudden gathering of the oil palm associations
that included captains of the six biggest oil palm companies seemed to
reflect the seriousness of low palm oil prices, KLK's Lee said oil
palm planters and exporters are not in dire straits.
"Please do not misread this as a distress situation. At RM1,500 per
tonne, we're still profitable," he said, adding that oil palm planters
can manage production cost by lowering inputs.
He said KLK's oil palm planted area of some 170,000ha in Malaysia and
Indonesia have begun to reduce fertiliser inputs by 20 per cent.
"By using less fertiliser, we've cut back on our production cost by
about RM100 per tonne," he said.
Yesterday, the third month benchmark crude palm oil on Bursa Malaysia
Derivatives Exchange traded RM28 higher to close at RM1,488 per tonne.
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