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Commodities Today and Beyond

Wednesday, 14 February 2018 | MYT 12:00 AM

A bountiful new year

Chinese New Year’s eve will be upon us tomorrow. At this moment, Malaysians celebrating the festival will be making last minute preparations or travelling home for the reunion dinner to usher in the big day.

As we enter a new beginning, it is also a good time to reflect on the past year and look at our hopes for the new year.

The Chinese zodiac has five elements: metal, wood, water, fire and earth. I am not an expert in astrology but it is believed that these elements must be present for harmony to be established.

By analogy, I am of the view that an effective government must deliver in six key areas: healthcare, education, security, infrastructure, economic opportunities and the environment.

On all counts, our Government has done remarkably well last year and the years prior, though there will always be room for improvement.

Six cornerstones of a good government

Our infant mortality rate and life expectancy are among the world’s lowest and highest, respectively, while public healthcare is highly accessible and affordable.

According to the Health Ministry’s official website, 139 hospitals, 2,839 clinics, 196 Klinik 1Malaysia and 661 dental clinics spread across our country.

Meanwhile, our Malaysia Education Blueprint 2013-2025 focuses on full enrolment across all levels by 2020 (access), reaching the top third of countries in international assessments such as TIMMS and PISA in 15 years (quality), 50% reduction in achievement gaps by rural-urban, socio-economic and gender (equity), fostering unity amongst students and maximising student outcomes within the budget (efficiency).

In the 2015 TIMMS results, Malaysia improved by four and eight places in Mathematics and Sciences, respectively, showing early promise.

Incidences of crime, which was rising for three consecutive years prior to 2009, have dropped by 47% over the past six years.

This was made possible through the various successful programmes such as police omnipresence, modern policing and establishment of the Border Security Agency in 2016.

We continue to invest in infrastructure which is critical for citizens’ well-being.

In the urban areas such as Greater Kuala Lumpur, improvements in public transport such as stage buses, KTM Komuter and Light Rapid Transit (LRT), augmented by the full commissioning of the new Mass Rapid Transit (MRT) last year, has significantly increased public transport modal share.

In the rural areas, projects such as the East Coast Rail Link (ECRL), Pan Borneo Highway and the West Coast Expressway, which will also benefit my constituents in Teluk Intan when it opens in 2019, will dramatically create new opportunities in the underdeveloped and underserved regions.

Our efforts in balancing the needs of urban and rural Malaysians will ensure greater parity in growth and economic opportunities.

Last but not least, our robust 5.8% GDP growth for 2017, as forecasted by the World Bank, is the catalyst for economic opportunities for the rakyat, underpinned by strong exports for E&E and resource-based products such as petroleum and commodities. As a result, the labour force participation rate is at a healthy 67.9% as at Q3 2017 with a low unemployment rate of 3.4% for the same period.

Be that as it may, cost of living is a concern, especially for the urban lower-income households, where inflation of food and housing costs requires our effective intervention.

On the environment, Malaysia played a critical role during the COP 21 negotiations in Paris.

Despite an unprovoked onslaught from Europe on issues like deforestation and environmental degradation, we have a comprehensive and sustainable approach on managing our natural treasures, especially our rainforests.

We have responded to their attacks and I lead a delegation to Europe early this week to set the record straight.

Commodities Big Five did well

The Big Five of commodities – palm oil, rubber, timber, cocoa and pepper – have done remarkably well this year and exceeded our expectations.

Exports worth RM140.3bil was recorded in 2017, 15% higher than the RM121.9bil for the entire 2016. Palm oil took the lion’s share with RM77.8bil compared to RM67.6bil for FY 2016, followed by rubber at RM32.3bil (FY 2016: RM24.8bil) and timber at RM23.2bil (FY 2016: RM21.9bil).

Recovering from the El Nino-affected production in 2016, fresh fruit bunch yield rose to 17.89 tonnes per hectare in 2017 from 15.91 tonnes per hectare in 2016, while palm oil production increased to 19.9 million tonnes in 2017 from 17.3 million tonnes in 2016.

These represented year-on-year growth of 12% and 15%, respectively. On the other hand, natural rubber production expanded by 7% from 673,800 tonnes in 2016 to 724,000 tonnes in 2017.

Entering 2018, we need to be relentless in pursuing productivity improvement, strengthening sustainability of our produce and diversifying our markets and offerings.

With scarcity of land for new planting, yield improvement and mechanisation must be prioritised.

MSPO enters its second full year of certification and efforts must be redoubled to ensure the target of certifying all oil palm planted areas by December 2019 is achieved.

In respect of markets, the recent support from France, Sweden and the Netherlands against the EU Parliament’s quest to ban palm biodiesel from the region from 2021 gives us some confidence that we may be turning the corner in our fight against this crop apartheid.

Assurances from India and China that they intend to further support Malaysian imports point to a positive outlook for palm oil as well as rubber in 2018.

Indeed, our efforts in growing the commodities sector will play a key role is supporting a 5.2% GDP growth expected of Malaysia in 2018.

May the five blessings be upon you

As we express our gratitude for a good year that we had and our hopes for an even better year to come, I humbly wish all Malaysians, especially our friends who will be celebrating the Chinese New Year, a bountiful year ahead.

May the five blessings be upon you and your family. Gong Xi Fa Cai!

Datuk Seri Mah Siew Keong is Plantation Industries and Commodities Minister. Commodities Today and Beyond is his op-ed to share his views, hope and vision for commodities with everyday Malaysians.