KUCHING, Aug 28: Thirteen associations representing Malaysia’s plantation and commodities sector, including from Sarawak, have jointly called on the federal government to reinvest collections from the Windfall Profit Levy (WPL) back into the industry instead of letting the funds disappear into general government revenue.
The associations said that while plantation companies have long contributed significantly to national coffers, the continued imposition of WPL has created heavy cost burdens and market imbalances, especially since plantation companies are already required to subsidise the government’s cooking oil programme for the nation.
“No other sector is singled out in this way. The Windfall Profit Levy cannot remain just another source of government revenue. It must be reinvested into the plantation and commodities industry to drive replanting, mechanisation, sustainability, and to ease the cooking oil subsidy burden.
“At today’s costs, the situation is unsustainable,” the associations said in a joint statement yesterday.
The statement was endorsed by 13 industry associations, namely the Malaysian Palm Oil Association (MPOA), Malaysian Estate Owners’ Association (MEOA), Sarawak Oil Palm Plantation Owners Association (SOPPOA), East Malaysian Planters Association (EMPA), Sarawak Dayak Oil Palm Planters Association (DOPPA), Palm Oil Millers Association (POMA), Malayan Edible Oil Manufacturers’ Association (MEOMA), Malaysian Oleochemical Manufacturers (MOMG), Malaysian Biodiesel Association (MBA), Malayan Agricultural Producers Association (MAPA), Incorporated Society of Planters (ISP), Palm Oil Refiners Association of Malaysia (PORAM), and the National Association of Smallholders (NASH).
The groups outlined four critical areas where WPL collections should be channelled to strengthen the sector, including for replanting as the rising costs and insufficient incentives have slowed replanting which in turn threatens future yields.
“Redirecting WPL into a structured planting cess would provide soft loans and targeted support for rejuvenating ageing estates,” they said.
The other aspect is to support adoption of mechanisation, technology, automation, and renewable energy solutions, given labour shortages and rising input costs.
“WPL funds could finance research and development, tax incentives, and pilot projects to improve efficiency and reduce dependency on foreign workers,” they explained.
With the industry under increasing global scrutiny to comply with deforestation regulations, carbon credit requirements, and renewable energy standards, the associations stressed that it is vital to channel the fund into sustainability initiatives such biogas, biomethane, and carbon certification to protect Malaysia’s market access.
With crude palm oil (CPO) prices exceeding RM3,900 per tonne, the associations highlighted that manufacturers are incurring heavy losses to maintain the government’s RM2.50/kg ceiling price for bottled cooking oil.
“It is unsustainable and the gap between actual CPO prices and subsidised oil prices is widening. This not only places extreme financial strain on manufacturers but also raises concerns about the sustainability of the subsidy system itself.”
The associations urged the government to either revise the ceiling price or allocate WPL funds to offset industry losses.
They also called for an urgent review of the WPL threshold, saying the levy has become punitive rather than reflective of genuine windfall profits. With current production costs averaging RM2,600–RM3,000 per tonne and fertiliser prices up by 30 per cent since late 2024, the current levy of RM150 per tonne eats into margins and risks undermining industry viability.
The associations reaffirmed their commitment to supporting Malaysia’s food security, rural development, and economic resilience but stressed that a fairer framework is needed.
“Funds collected from the industry must be reinvested into the industry itself. Redirecting WPL back to the Ministry of Plantation and Commodities is the only fair and logical path forward,” the statement concluded.
“No other sector is singled out in this way. The Windfall Profit Levy cannot remain just another source of government revenue. It must be reinvested into the plantation and commodities industry to drive replanting, mechanisation, sustainability, and to ease the cooking oil subsidy burden.
“At today’s costs, the situation is unsustainable,” the associations said in a joint statement yesterday.
The statement was endorsed by 13 industry associations, namely the Malaysian Palm Oil Association (MPOA), Malaysian Estate Owners’ Association (MEOA), Sarawak Oil Palm Plantation Owners Association (SOPPOA), East Malaysian Planters Association (EMPA), Sarawak Dayak Oil Palm Planters Association (DOPPA), Palm Oil Millers Association (POMA), Malayan Edible Oil Manufacturers’ Association (MEOMA), Malaysian Oleochemical Manufacturers (MOMG), Malaysian Biodiesel Association (MBA), Malayan Agricultural Producers Association (MAPA), Incorporated Society of Planters (ISP), Palm Oil Refiners Association of Malaysia (PORAM), and the National Association of Smallholders (NASH).
The groups outlined four critical areas where WPL collections should be channelled to strengthen the sector, including for replanting as the rising costs and insufficient incentives have slowed replanting which in turn threatens future yields.
“Redirecting WPL into a structured planting cess would provide soft loans and targeted support for rejuvenating ageing estates,” they said.
The other aspect is to support adoption of mechanisation, technology, automation, and renewable energy solutions, given labour shortages and rising input costs.
“WPL funds could finance research and development, tax incentives, and pilot projects to improve efficiency and reduce dependency on foreign workers,” they explained.
With the industry under increasing global scrutiny to comply with deforestation regulations, carbon credit requirements, and renewable energy standards, the associations stressed that it is vital to channel the fund into sustainability initiatives such biogas, biomethane, and carbon certification to protect Malaysia’s market access.
With crude palm oil (CPO) prices exceeding RM3,900 per tonne, the associations highlighted that manufacturers are incurring heavy losses to maintain the government’s RM2.50/kg ceiling price for bottled cooking oil.
“It is unsustainable and the gap between actual CPO prices and subsidised oil prices is widening. This not only places extreme financial strain on manufacturers but also raises concerns about the sustainability of the subsidy system itself.”
The associations urged the government to either revise the ceiling price or allocate WPL funds to offset industry losses.
They also called for an urgent review of the WPL threshold, saying the levy has become punitive rather than reflective of genuine windfall profits. With current production costs averaging RM2,600–RM3,000 per tonne and fertiliser prices up by 30 per cent since late 2024, the current levy of RM150 per tonne eats into margins and risks undermining industry viability.
The associations reaffirmed their commitment to supporting Malaysia’s food security, rural development, and economic resilience but stressed that a fairer framework is needed.
“Funds collected from the industry must be reinvested into the industry itself. Redirecting WPL back to the Ministry of Plantation and Commodities is the only fair and logical path forward,” the statement concluded.