Unggah: Fall in ringgit's value against US dollar no impact on palm oil, rubber prices

The fall in the ringgit's value to the US dollar has had no impact on the stability of palm oil and rubber prices in the country, says the Minister of Plantation Industries and Commodities, Datuk Amar Douglas Uggah Embas.

He said the decline in prices of both commodities resulted from a number of factors, among them, the slowing down of economic growth in importing nations as China, the European Union and the United States, which affected demand.

This, he added, was alongside an increase in stocks due to production outstripping demand.

"The rate of the country's palm oil stocks increased from 1.99 million tonnes in 2013 to 2.02 million tonnes in 2014. Up to September 2015, the palm oil stock was at 2.63 million tonnes and at the same time, stocks of soya oil, the main competitor to palm oil, also rose.

"The rate of global natural rubber stocks rose from 2.35 million tonnes in 2012 to 3.12 million tonnes in 2014, although that from January-June 2015 was seen to have fallen to 2.6 million tonnes," he said in reply to Datuk Ngeh Koo Ham (DAP-Beruas) in the Dewan Rakyat here today.

Ngeh had asked why the prices of natural rubber and palm oil had fallen in ringgit value, although both commodities were sold in the US dollar which had surged against the former.

On the action taken to rehabilitate the prices of both commodities and ensure the welfare of smallholders, Uggah highlighted that for palm oil, the government had enhanced the use of biodiesel from the B5 programme to B7 from November last year and had also made available a RM100 million fund under the Replanting Incentive Scheme in 2015.

In the case of rubber, the government was working to enhance production by mixing it with bitumen for the construction of roads from next year.

"At the international level under the International Tripartite Rubber Council (ITRC) framework, we, together with Thailand and Indonesia are working together to find ways to stabilise the price of natural rubber.

This includes strengthening the Supply Management Scheme and Agreed Export Tonnage Scheme among ITRC members.

"It is the same with palm oil, where as a member of the Council of Palm Oil Producing Countries(CPOP), there is planning and implementation of activities related to the development of the oil palm industry as well as ensuring a reasonable price for palm oil," said Uggah.