Vol. 20 (2) September 2020 – OPIEJ https://opiej.mpob.gov.my Oil Palm Industry Economic Journal Thu, 14 Jan 2021 06:39:36 +0000 en-US hourly 1 https://wordpress.org/?v=7.0 India’s Edible Oil Policy: Intrinsic Challenges for Malaysian Palm Oil https://opiej.mpob.gov.my/indias-edible-oil-policy-intrinsic-challenges-for-malaysian-palm-oil/ Wed, 30 Sep 2020 23:43:03 +0000 https://opiej.mpob.gov.my/?p=1419 Read more]]> India is a major player in the global oilseeds scenario, accounting for 14.3% of the global harvested area, but only 6.4% of the global production for the 10 major oilseeds. India’s production accounts for 5% of global oils and fats output, but the country’s consumption represents 11% of world oils and fats consumption. Faced with low domestic edible oils production, India imports up to 15 million tonnes of edible oils annually. India has been the world’s leading importer of vegetable oils, currently accounting for 18% of global vegetable oils imports. Thus, India has an important role in global oils and fats trade and impacts this not only through import quantities but also by policies. Palm oil accounts for 60% of India’s vegetable oil imports. Hence, India’s edible oil import policies have a profound impact on palm oil. Recently, India’s tariff and non-tariff measures have impacted the access of palm oil, and particularly that of Malaysian palm oil into the country. These developments need to be viewed in the context of India’s obligations under existing free trade agreements with Malaysia and other exporters of edible oils to India. This paper highlights developments in India’s trade policies related to edible oil imports and reviews how these have impacted the access of Malaysian palm oil into the country.

Keywords: import duty, self sufficiency, import policy, non tariff measures, trade agreement

]]> Understanding the Features and Roles of the Board of Directors of Sustainable Oil Palm Growers Cooperatives in Sabah https://opiej.mpob.gov.my/understanding-the-features-and-roles-of-the-board-of-directors-of-sustainable-oil-palm-growers-cooperatives-in-sabah/ Wed, 30 Sep 2020 23:39:28 +0000 https://opiej.mpob.gov.my/?p=1415 Read more]]> Sustainable Oil Palm Growers Cooperatives or known in Malay as ’Koperasi Penanam Sawit Mampan‘ (KPSM) is an instrument to increase the income of oil palm smallholders and create employment opportunities in Malaysia. KPSM members and Board of Directors (BOD) consist of oil palm planters themselves. This study aims to investigate KPSM board members’ characteristics and their understanding of their roles in operating the KPSM. Data were collected from 104 KPSM board members in Sabah. The quantitative research approach was used and mean values were obtained for data analysis. The majority of the respondents were found to be male with an average age of 53 years and a moderate education level. The respondents were found to be aware of their roles in communicating with other board members, carrying out the cooperatives’ policies, monitoring the internal control system, and complying with cooperative regulations. Most of the items that measured the roles of the BOD scored above 4.0 based on a five-point Likert scale, indicating good to excellent understanding. However, the respondents’ understanding of the KPSM reports was moderate with a mean value of 3.98, which was mainly due to the respondents’ moderate education level. This study also found that the majority of the respondents spent 2.2 days per month on average at their respective KPSM. KPSM needs competent management to serve the members’ requirements and KPSM board members need to have the appropriate knowledge to conceive new ideas for their respective cooperative. This study suggests that further research should be done to investigate why the younger generation is not interested in agriculture cooperatives and to determine other factors that influence the performance of agriculture cooperatives.

Keywords: oil palm smallholders, Board of Directors, cooperative, KPSM, smallholder demographic profiles.

]]> The Nexus between Energy Consumption and Carbon Emission: The Case of Malaysian Palm Oil Industry https://opiej.mpob.gov.my/the-nexus-between-energy-consumption-and-carbon-emission-the-case-of-malaysian-palm-oil-industry/ Wed, 30 Sep 2020 23:35:24 +0000 https://opiej.mpob.gov.my/?p=1411 Read more]]> The increase in palm oil production for food and products has raised major concerns on greenhouse gas (GHG) emission. Studies have shown that agricultural and plantation acreage are one of the biggest contributors to the total global GHG emission, accounting for 17%. This is alarming for Malaysia’s reputation as the second largest palm oil producer, which currently contributes 39% of world palm oil production and 44% of world exports. While most studies have focused on the GHG emission from palm oil mill effluent (POME) and GHG emission from oil palm peat, little attention is given to GHG emission arising from operation during oil palm planting production activities. Hence, this paper aims to measure the impact of energy use on GHG emission of these two palm oil-related activities. In this study, we develop an extended Input-Output Table by introducing two vectors: (i) sectoral energy consumption in unit of energy (ktoe) and (ii) sectoral carbon emissions that are estimated separately. From a policy perspective, this paper will provide answers to critical and policy-relevant questions such as climate change mitigation action through the reduction of GHG emissions for sustainable palm oil production.

Keywords: energy consumption, carbon emissions, palm oil industry, input-output.

]]> The Transportation Sector’s Role in the Growth of the Upstream Oil Palm Sector https://opiej.mpob.gov.my/the-transportation-sectors-role-in-the-growth-of-the-upstream-oil-palm-sector/ Wed, 30 Sep 2020 23:31:29 +0000 https://opiej.mpob.gov.my/?p=1408 Read more]]> The transportation sector plays a crucial role in supporting the growth of the oil palm sector, whereby an efficient transportation system provides more economic and social opportunities. The relationship between these two sectors can be examined through their inter-sectoral linkages. However, the lack of exposition on the role of sectoral linkages of the transportation sector would disregard the importance of this sector in the growth of the oil palm sector. This study attempts to analyse the role of the transportation sector, comprising land, water, and air transport in the oil palm sector’s growth by studying the inter-industry linkages and production-inducing effects. The results indicate that the transportation sector makes a low contribution to the growth of the upstream oil palm sector.

Keywords: input-output analysis, hypothetical extraction method, oil palm sector, transportation sector, inter-linkages.

]]> The Effect of Exchange Rate on Palm Oil Exports between Malaysia and its Trading Partners https://opiej.mpob.gov.my/the-effect-of-exchange-rate-on-palm-oil-exports-between-malaysia-and-its-trading-partners/ Wed, 30 Sep 2020 06:47:07 +0000 https://opiej.mpob.gov.my/?p=1395 Read more]]> Despite the vast research on the exchange rate and trade, little is known
about the perspective of Malaysia, especially on export of agricultural
commodities. In the current situation, Malaysia is experiencing a
depreciation of the ringgit over a short-term period. Therefore, the demand
for trade is likely to change correspondingly. Theoretically, several major
factors affect the movement of export volumes; one of them is a country’s
exchange rate. Hence, the objective of this study is to investigate the effect
of exchange rate on the export of palm oil from Malaysia to its major
trading partners. The gravity model was estimated using a panel data set
for the bilateral export of palm oil, where empirical findings revealed a
negative and significant effect of the exchange rate on the export of palm
oil. It means that any depreciation in the Malaysian Ringgit will lead to
lower exports of this commodity.

Keywords: palm oil, export, exchange rate, gravity model.

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