CPO uptrend: Earnings reach up to RM1,500 a month Smallholders' income rides on high prices
Business Times, 19 February 2004
By ZAIDI SHAM ISMAIL
MALAYSIA 'S more than 100,000 oil palm smallholders have seen their income increase following strong crude palm oil (CPO) prices of late.
National Association of Smallholders Malaysia president Datuk Mazlan Jamaluddin said most smallholders earn a monthly income of between RM1,000 and RM1,500 compared with less than RM1,000 in 2001.
"Not only that, rubber smallholders are also earning good income due to the good and stable prices of latex in the international market," Mazlan told Business Times in a phone interview in Kuala Lumpur yesterday.
CPO prices have been on an uptrend recently and Primary Industries Minister Datuk Seri Dr Lim Keng Yaik, industry captains and traders have said that it (CPO) is expected to hit the RM2,000 a tonne mark any time soon from RM1,900 currently.
A settler can harvest up to 5 tonnes of oil palm a month depending on the size of his smallholding at between 1ha and 5ha as well as the yield of the oil palm.
In 2001, a settler was paid about RM180 for every tonne of fresh fruit bunches (FFB) harvested which works out to RM900 if the settler can harvest 5 tonnes of FFB in a month.
"As at December last year, if a settler could harvest the same amount, he stood to earn RM1,500 a month because a tonne of FFB is now priced at RM300," said an industry source.
Prices for the FFB per tonne vary depending on a monthly or daily basis as they are based on the oil extraction rate of every FFB as well as the prices of the international palm oil market determined by the Malaysian Palm Oil Board (MPOB).
MPOB rates can be as low as RM87 a tonne for every FFB and as high as RM300 based on international market conditions.
"Bear in mind, some smallholders can harvest up to 8 tonnes of FFB a month which will bring him an income of up to RM2,400 a month, and the CPO price is still rising," said the source.
He said smallholders' income have doubled since 2001 when CPO price was traded at an average of RM891 a tonne compared with the current price of RM1,900 a tonne.
At its lowest, an FFB was priced at RM70 a tonne when CPO price averaged at RM895 in 2001.
Malaysia has about 160,000 smallholders nationwide, of which 60,000 are involved in planting rubber. They both cover a landbase of about 1.2 million hectares nationwide.
The smallholders come under government-run agencies such as the Federal Land Development Authority, Federal Land Consolidation and Rehabilitation Authority and the Rubber Industry Smallholders Development Authority, state agencies as well as private individuals.
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