The Ministry of Plantation Industries and Commodities (MPIC) welcomes the announcement by the “Jihad Against Inflation” special task force that the prices of cooking oil will be reduced in stages. This follows an agreement from those in the palm oil industry to adjust the prices based on the current market prices of crude palm oil (CPO).
Previously, the Ministry had a series of dialogues with key players in the palm oil industry to find solutions to address the rising prices of this essential item without compromising the competitiveness of the sector. The industry cooperates with the government on this matter based on the spirit of the Malaysian Family (Keluarga Malaysia).
The market price of palm oil constantly fluctuates based on fundamental factors and current market sentiments.
Palm oil prices started to show a significant upward trend from mid-2020 and had on several occasions broken record high prices in the history of the country’s palm oil industry from January 2021 to May 2022. Rising crude palm oil (CPO) prices have led to the prices of palm oil products, including cooking oil, to increase significantly in the local market.
The four (4) main factors that contribute to the increase in CPO prices are:
i. Low CPO production
ii. Rising soybean oil (SBO) prices
iii. Brent Crude Oil (BCO) price increases
iv. Strong palm oil exports in key markets
However, the increase in cooking oil prices is still offset by the Government through a subsidy for 60,000 tonnes or 60,000,000 kgs of cooking oil packets (1kg polybag) per month to meet the needs of local consumers, especially for the B40 group. The price of a subsidised packet of cooking oil for local consumers is RM2.50 per kg, compared to the actual market price of around RM6.00 per kg. MPIC is confident that with the cooperation of the government machinery in all relevant Ministries, the prices of cooking oil will come down gradually.
The MPIC will also continue to hold engagement sessions to find win-win solutions for all and ensure the welfare of palm oil smallholders. In addition, MPIC is committed to ensuring the palm oil industry remains the largest commodity sector and continues to contribute to the country’s economic development to ensure the well-being of the people. -Bernama
