KUALA LUMPUR: Favourable global prices of commodities and robust growth in the sector will benefit all industry players who stand to gain from the increased revenue.
Minister of Plantations, Industries and Commodities Datuk Zuraida Kamaruddin said this "windfall" will translate into higher profitability and lead to the Government increasing its tax revenue.
"This will not only help expedite the National Recovery Plan (NRP), but the increase in tax revenue will enable the Government to carry out more socio-economic projects in the spirit of "Keluarga Malaysia".
"This includes building schools, hospitals, roads and delivering financial aid to the needy," she said in a statement.
For example, palm oil export revenue for 2022 is expected to grow by 11.8 per cent to RM72.25 billion from RM64.62 billion recorded in 2021.
Export of timber and timber products is expected to be RM24 billion or a rise of 5.52 per cent compared with 2021 (RM22.74 billion in value).
Based on the projected average CPO price for 2022 of RM4,250 per tonne and the projected CPO production for 2022 of 19.0 million tonnes, it is estimated that the total collection of windfall profit tax levy (WPL) in 2022 would exceed RM1 billion.
"The palm oil industry is also estimated to generate another RM2 billion worth of tax revenue from export tax in 2022.
"This development is timely considering that the Government has spent billions of ringgit over the past two years to help Malaysians impacted by the twin crises of the Covid-19 pandemic as well as the resulting economic slump," said Zuraida.
She said the MPIC is glad it can complement the Government's efforts to replenish its coffers.
On its part, the MPIC will step up efforts to help industry players under its purview seize this economic opportunity, including opening up more markets for our commodities, she said.
"Over the past two months, I have led extensive trade missions abroad to open up markets for our commodities.
"Countries like Iran, Turkey, India and China have since expressed interests to beef up imports of our commodities,".
Some countries have already increased their purchase of these products, while others are in the midst of finalising the trade deals.
For example, China is expected to import an additional 500,000 tonnes of palm oil from Malaysia in 2022.
"India is expected to be the country's top market destination for Malaysian palm oil, with an additional import of two million tonnes this year.
"India is expected to face edible oil shortages due to its reliance on sunflower oil from Ukraine and changes to Indonesia's oil palm export policy.
"Malaysia's palm oil will help fill this vacuum in India," she said.
Zuraida said the MPIC will also assist industry players, especially smallholders to make their businesses more sustainable in the future.
This includes efforts to automate their businesses, enhance information technology adoption and reduce foreign labour dependency.
This is possible with the proper reinvestment strategy made viable with their increased turnover.
For example, the smallholder replanting easy financing scheme aims to provide easy financing to smallholders to replant unproductive oil palm.
It offers a low interest rate of two per cent and a moratorium period of 48 months.
"There is also the easy financing scheme for agricultural inputs for oil palm smallholders with a profit rate as low as two per cent which aims to help smallholders purchase agricultural inputs such as fertilisers and weed and pest control materials.
"I would also like to take this opportunity to thank the Prime Minister, Datuk Seri Ismail Sabri Yaakob for the extensive help to provide support for the MPIC to carry out its duties. The MPIC will ensure that it will not disappoint the Prime Minister," she added.