More calls to lift export curb on oil palm seeds

This is written by my colleague Zaidi Isham Ismail.

Another industry specialist has supported the call to lift the ruling restricting export of germinated oil palm seeds that hinders Malaysia's prospect to be the world's largest supplier of the commodity.

Kulim (Malaysia) Bhd director Datuk Haron Siraj said Malaysia has to export the planting material because the country has very limited land available for oil palm cultivation namely in Sarawak.

"The government should review the restriction and allow the export of oil palm seeds without hassle or any other tight conditions due to limited land and surplus oil palm seeds production," Haron told Business Times in an interview.

The government, since the 1970s, restricts the export of oil palm seeds to ensure enough supply for local farmers as well as protect the seeds' intellectual property rights from being copied by other oil palm producers.

Malaysia, however, does supply oil palm seeds to Malaysian companies overseas as well as to Honduras, Colombia, Sierra Leone, Thailand and Indonesia on a government-to-government basis.

Felda Agricultural Services Sdn Bhd executive director and chief executive officer S. Palaniappan said, earlier this month, the situation had now changed. Malaysia's oil palm sector now produces more than enough oil palm seeds to cater for domestic use as well as the export market. Malaysia, in total, produces 80 million oil palm seeds, of which 50 million are supplied to local planters, while the remaining 30 million can be sold to other customers local and abroad.

Haron said the oil palm seeds only has a shelf life of two years and are wasted when crude palm oil prices are high as local planters delay replanting activities to reap the good price. "The issue of intellectual property rights should also not arise because the electrical and electronics industry for example sell the latest and the best products in the market. We should also do the same with the oil palm industry - sell the latest oil palm planting materials," said Haron, who is former secretary general to the then Primary Industries Ministry (now Plantation Industries and Commodities Ministry).

Haron, who also sits on the Malaysian Palm Oil Board programme advisory committee, said demand in African countries near the equator line such as Nigeria (oil palm country of origin) is enormous as they want to rehabilitate their own oil palm industry. "We can help them with the oil palm planting materials and charge them royalty payments."

Another idea is to export consultancy services to countries such as Colombia to develop their oil palm industries or develop nurseries in Africa rather than Malaysian companies go abroad to open plantations overseas.

"I know some plantation companies are wary to go overseas due to numerous issues such as soil conditions but don't get involved in land tenure. What we can do is to operate overseas on a build, operate and transfer basis such as in the construction sector. Companies can export the oil palm planting materials, offer consultancy services, break even, transfer operations and then leave after two cycles of oil palm planting (each cycle 20-30 years)," Haron said.

He added that companies can also set up mills when the planted area exceed 30,000ha.

Oil palm seeds can be a significant income earner for the country as it can fetch a higher price in the overseas market, at almost RM3 per seed compared to almost RM2 per seed in Malaysia.

Palaniappan had estimated that Africa and Indonesia alone have demand for 50 million and 130 million oil palm seeds a year respectively as everybody now wants to cash in on the crop.

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