Cooking oil subsidy strategy reduces negative impact of palm oil price fluctuations

KUALA LUMPUR: The cooking oil subsidy strategy implemented by the government has reduced the negative impact of palm oil price fluctuations in the world market on local consumers, the Ministry of Plantation Industries and Commodities said.

Minister Datuk Dr Mohd Khairuddin Aman Razali said the increase in cooking oil prices in the local market was still small even though crude palm oil (CPO) prices had risen significantly during the period of July 2019-January 2021.

“Besides that, consumers have the option to buy one kilogramme (kg) of subsidised cooking oil at RM2.50, especially for those in the B40 (bottom 40 per cent of household income) group,” he said in a statement today.

Mohd Khairuddin said during the 2019-2020 period, the average CPO price in the local market recorded the lowest level of RM1,879.00 per tonne in July 2019 and the highest level of RM3,620.50 per tonne in December 2020.

He said the CPO price increased by 92.7 per cent or RM1,741.50 a tonne compared to the lowest level recorded in 2019.

“The price of palm oil and palm-based products is determined by the world market involving factors such as demand and supply of oil, as well as world fat and various other factors.

“This price increase has also raised the country’s revenue besides helping about 500,000 oil palm smallholders to improve their socio-economic status,” he said.

Mohd Khairuddin hopes the global palm oil price will continue to remain high for the year 2021 so that the people could enjoy the benefits of the price increase through its returns made by the government.

At the same time, he said the ministry was very concerned with the issue of rising cooking oil prices in the local market which has gone viral on social media recently, linking it to the increase in the CPO price.

“The Malaysian Palm Oil Board (MPOB) data show that about one million tonnes of palm oil are allotted for the use of the local cooking oil market with a fraction of 0.72 million tonnes for subsidised cooking oil of one kg plastic packets.

“Meanwhile, the remaining 0.28 million tonnes are non-subsidised, which can be obtained in bottles of one kg to five kg, and tins of 17 kg,” he added.

Malaysia exported 24 million tonnes of palm oil and palm-based products worth RM64.8 billion for the period of January-November 2020. – Bernama