Plantation Industries

and Commodities

in MalaysiaMohamad Sanuri ShahidDeputy Secretary General

(Strategic Planning and Management)Ministry of Plantation Industries and Commodities,

Malaysia

Global Islamic Financial Forum (GIFF 2012)

19th Sept. 2012

SCOPE OF PRESENTATION

2

Overview of Plantation Industries in

Malaysia

Profile of Commodities

Export Performance

National Commodity Policy 2011-2020

Financing Prospects in Commodities:

Upstream

Downstream

Conclusion

OVERVIEW

3

Plantation commodities - since pre-independence

era (pepper, rubber, coffee and coconut)

Rubber and tin twin pillar of economy

Crop diversification - oil palm was promoted

esp. through FELDA

Downstream ind. devt. resource based industries

Contribution of plantation commodities:

GDP 7%

Export earnings - RM141 billion (2011)

Employment - 705,000 (local - 365,000; foreign - 340,000)

(Note: upstream sector incl. smallholders)

MINISTRY OF PLANTATION INDUSTRIES

AND COMMODITIES (MPIC)

4

Malaysian Palm Oil Board (MPOB)

Malaysian Rubber Board (MRB)

Malaysian Timber Industry Board (MTIB)

Malaysian Cocoa Board (MCB)

Malaysian Pepper Board (MPB)

National Kenaf and Tobacco Board (NKTB)

Malaysian Palm Oil Council (MPOC)

Malaysian Timber Council

(MTC)

Malaysian Timber Certificate Council (MTCC)

Malaysian Furniture Promotion Council (MFPC)

Malaysian Rubber Export Promotion Council

(MREPC)

Main Stakeholders:

6 Boards, 5 Councils & Industry Associations

PROFILE OF COMMODITIES

5

Planted Area (Hectarage)

Commodities Estates Smallholders Total (ha)

Oil Palm 4,302,283 697,826 5,000,109

Rubber 339,722 682,978 1,022,700

Cocoa 1,080 19,463 20,543

Pepper 207 14,593 14,800

Tobacco - 4,242 4,242

Kenaf - 1,279 1,279

Total4,643,292

(76.6%)

1,420,381

(23.4%)6,063,673

Commodity2010 2011 %

Change(RM Million )

Oil Palm 62,222.72 83,395.51 34.03

Rubber 26,217.70 32,422.85 23.67

Timber 20,330.55 19,833.99 (2.44)

Cocoa 4,189.47 4,215.44 0.62

Tobacco 1,034.95 1,058.88 2.31

Pepper 198.37 284.70 43.52

Total 114,193.76 141,211.3723.66

(average)

EXPORT PERFOMANCE

OF COMMODITIES (2011)

6

7Largest exporter

of rubber glove

8th largest exporter

of furniture

Largest cocoa grinder

in Asia Pacific

3rd largest producer of

natural rubber

Largest exporter

of palm oil products

5th largest producer of

pepper

MALAYSIAN COMMODITIES

AT THE GLOBAL STAGE

MAJOR PALM-BASED PRODUCTS

EXPORT DESTINATIONS

USA

0.71 MnT

(RM 2.53 billion)

EU

1.94 MnT

(RM 5.35 billion)

China, PR

2.02MnT

(RM 6.39 billion)

Japan

0.43 MnT

(RM 1.67 billion)

Pakistan

0.76 MnT

(RM 2.36 billion)

India

1.18 MnT

(RM 3.85 billion)

Source: MPOB

Total Export Volume &

Value For 2011:

24.27 Mn T (RM80.41 billion)

Total Export Volume &

Value For Q2 2012:

11.61 Mn T (RM 36.06 billion)

Middle East &

Northern Africa

0.72 MnT

(RM 2.46 billion)

MAJOR NATURAL RUBBER

EXPORT DESTINATIONS

Total Export Volume &

Value For Q2 2012 e:

353,355 tonnes

(RM 3.75 billion)China

(RM 1.47 billion)

Germany(RM 0.54 billion)

South Korea (RM 0.16 billion)

USA (RM 0.11 billion)

Iran(RM 0.08 billion)

France(RM 0.05 billion)

Brazil(RM 0.13 billion)

Netherlands(RM 0.11 billion)

Others(RM 1.10 billion)

China

Germany

South Korea

USA

Iran

France

Brazil

Netherlands

Others

Including export of compound to China

10

Wooden

Furniture

1,531

31%

Plywood

1,271

26%

Sawntimber

621

13%

Logs

448

9%

Fibreboard

275

5%

BJC

241

5%

Mouldings

195

4%

Other

Products

146

3%

Veneer

80

2%

Chipboard/

Particleboard

75

1%

Wooden

Frame

33

1%Rattan

Furniture

5

0%

EXPORT VALUE OF TIMBER

BY PRODUCTS (Q1/ 2012)

NATIONAL COMMODITY POLICY

2011-2020

National Commodity Policy (NCP) 2011-2020

was launched on 17 February 2012

The NCP provides strategic direction for the

development of the plantation and commodities

industry until 2020

Strategic thrusts to further transform the

commodity sector

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NATIONAL COMMODITY POLICY 2011-2020 : THE SEVEN THRUSTS

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Thrust 1:

Strengthening Commodities Industries in National Economic Development

Thrust 2:

Elevating Modernisation of the Commodity Industry

Thrust 3:

Diversifying Production of High Value-added Products

Thrust 4:

Generating New Sources of Revenue

Thrust 5:

Enhancing Competitiveness and Market Expansion

Thrust 6 :

Accelarating the Development of Smallholders and Entrepreneurs

Thrust 7:

Developing and Strengthening Human Capital in Commodity Industries

13

Commodities 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Palm Oil 62.9 66.99 71.34 75.98 80.92 86.0 89.18 92.48 95.90 99.45 103.0

Rubber 24.7 27.66 30.98 34.70 38.87 43.6 48.96 54.99 61.75 69.34 78.0

Timber 20.3 23.16 26.37 30.04 34.22 39.0 41.50 44.15 46.98 49.98 53.2

Cocoa 4.2 4.32 4.45 4.59 4.73 4.9 5.10 5.31 5.53 5.75 6.0

Pepper 0.2 0.25 0.29 0.33 0.38 0.4 0.45 0.50 0.56 0.62 0.7

Tobacco 1.0 1.11 1.18 1.27 1.36 1.4 1.46 1.51 1.57 1.64 7.0

Total 113.3 123.61 134.86 147.13 160.52 175.3 187.05 199.58 212.95 227.22 242.6

EXPORT EARNINGS (ESTIMATED)

(RM Billion)

14

113.30123.61

134.86147.13

160.52

175.30187.05

199.58

212.95

227.22

242.60

0

50

100

150

200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Palm Oil Rubber Timber Cocoa Pepper Tobacco

EXPORT EARNINGS, 2010-2020

(RM Billion)

FINANCING

OPPORTUNITIES IN

COMMODITIES

FINANCING IN COMMODITIES:

ISSUES & OPPORTUNITIES

16

Upstream sector:

Govt. is providing assistance to smallholders - new and replanting,

mechanisation

Large estates are mainly financially independent hence

opportunities for financing

Downstream sector:

Limited availability of finance for SMEs

Some sectors have less accessibility to finance eg. timber sector

- considered as a sunset industry

Need for greater flexibility for export credit financing

longer credit period

Opportunities for syariah compliant instrument in commodity

trading eg. Bursa Suq Al Sila

FOREST PLANTATION

Govt. plans to establish large scale commercial forest

plantations to supply raw materials for the timber industries

9 timber species promoted incl. rubber, acacia mangium, teak

and bamboo

Target 375,000 hectares by 2020; 25,000 hectares per year

Govt. has approved loans amounting to RM608.34 million (47

agreements) covering 103,700 hectares

To date, 62,308 hectares have been developed

About RM2.4 billion of loans still needed

17

18

FOREST PLANTATION

Ladang Hutan Getah LTC , Bornion Timber Sdn Bhd 2 tahun

19

FOREST PLANTATION

Ladang Hutan species Acacia Mangium

AGARWOOD

Global export value of agarwood:

Malaysia is 2nd largest producer of agarwood after Indonesia. In

2009, exports from Pen. Msia valued at RM56.43 million

Trade of wild agarwood is controlled by CITES. Malaysias export

quota is 200,000 kg per year

However, no quota is imposed on planted agarwood

20

Products2006

(RM000)

2007

(RM000)

2008

(RM000)

Chips and Block 444,470 544,184 249,291

Oil 35,526 100,365 83,658

Powder 1,417 866 812

Total 481,413 645,415 333,761

AGARWOOD PLANTATION

21

Kuala Lipis, Pahang Simpang Pulai, Perak

Membuat lubang

menggunakan drill sebesar

10mm

Memasukkan bahan inokulan ke

dalam pokok karas

Hasil gaharu akan mula dituai

pada 6 bulan, 12 bulan dan 24

bulan. Semakin lama tempoh

hasil tuaian, mutu gaharu akan

bertambah.

INNOCULATION OF AGARWOOD

22

Pokok karas yang telah

matang

* 5- > 30 tahun

AGARWOOD GRADES

23

Grades of Agarwood Price Per kilo

(RM)

Grade A Super 25,000.00

Grade A 20,000.00

Grade B 18, 000.00

Grade C 15, 000.00

Grade D 8,000.00

Grade E 3,000.00

Others Grade 500.00 - 1, 000.00

Chips 5.00 - 100.00

CONCLUSION

24

Plantation and commodity sector will continue to

contribute to national economic growth part of

NKEAs

DKN provides pathway for greater transformation of

the commodity sector

Financing opportunities in commodity:

large estates

forest plantation

agarwood

SMEs

export credit financing

25

THANK YOU

www.mpic.gov.my