YB Wong Chen
Media on Palm Oil Issue
The mainstream media has given quite a lot of space on the issue raised by me on the palm oil industry yesterday. The issue appears to be less controversial but is in fact an economic scandal of grave misallocation of public funds.
To understand fully the context of my statement, we must first note that palm oil price is “pegged” to crude petroleum price because some 16% of palm oil is used as bio-diesel. And crude oil prices have been dropping dramatically of late.
There is a JP Morgan report out 2 weeks ago that by end of the year, crude oil could settle at USD70. If going forward, the new norm will be at the USD50 to USD70 range then we are truly screwed, economically as both oil and gas and palm oil represent some 50% of our national income (income that is generated by Malaysian companies and people). With GST in April 2015, we could see an economic perfect storm in 2016.
Against this backdrop is the failure of the govt to realise just how important palm oil is. It is a story of "cakap tapi tak bikin". The govt says it is important but allocates almost nothing to promote and defend the industry.