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The Plantation and Commodities Ministry (KPK) presented a proposal to the Ministry of Finance (MOF) last week to revise the windfall profit levy (WPL) on palm oil in the country.
KPK Minister Datuk Seri Johari Abdul Ghani said his ministry is now awaiting a response and decision from the MOF on the matter.
“Palm oil industry players have approached me and the Malaysian Palm Oil Board (MPOB), expressing concerns that the WPL may no longer be relevant, as production costs have risen.
“In the past, producing one tons of palm oil cost around RM1,800, but this has now increased to between RM2,800 and RM3,000,” he told reporters after the Malaysian Palm Industry Awards Ceremony (AISM) 2023/2024.
He said the WPL needs to be reviewed to ensure it remains relevant and to encourage further investment in the sector.
“This is what industry players have been asking for since I became minister of KPK nine months ago. They are calling for a government review of the WPL,” he said.
On July 6, Johari said KPK would collect data on costs across the palm oil industry before proposing any WPL revisions to the MOF ahead of Budget 2025.
Previously, KPK had assessed the issue raised by industry stakeholders and held discussions with relevant parties.
Currently, a WPL rate of 3% is imposed on palm oil prices exceeding RM3,000 per tons in Peninsular Malaysia and RM3,500 per tons in Sabah and Sarawak.
In his speech earlier, Johari highlighted the performance of the palm oil industry in the first half of 2024.
Crude palm oil (CPO) production rose to 8.9 million metric tons, compared to 8.1 million tons in the same period last year.
Palm oil and palm-based product exports also increased by 32% during this period, rising from 12.2 million metric tons to 16.1 million tons
On oil palm replanting, Johari emphasized the importance of using high-quality seedlings certified by the MPOB.
“These seedlings have the potential to produce more fruit bunches with a higher oil extraction rate. They also grow into shorter trees, which makes harvesting easier,” he said.
He added that replanting at a rate of four per cent annually is crucial for boosting sustainable palm oil production.