Sarawak Land Development Minster Tan Sri James Masing said Singapore-based Wilmar International Ltd conveyed its decision to the state in December.
“Since most of the state's oil palm are grown in cleared forests and peat swamp, (that means) they won't be buying from us.In another letter received today, Wilmar said from next year, it would buy CPO from oil palm grown in “areas with high carbon content” and from oil palm planted in forests before 2005.
“They can go to those who grow them in the Sahara desert,” he told a news conference in his office at Bangunan Baitulmal in Petrajaya today.
Masing said Wilmar buys 45% of Sarawak's crude palm oil (CPO) and refined it at its 10-year-old Bintulu refinery.
Masing said he sensed Wilmar's move was due to a renewed anti-Malaysian palm oil campaign by rival sunflower and soya bean producers in Europe and the United States.
“I don't buy their argument (about environmental concern). The US is the biggest polluter in the world. It’s not about the environment.
“It's pure economics and Wilmar is being used by the sunflower and soya bean producers to bully Sarawak.”
If Wilmar, one of the single biggest buyers of Sarawak's CPO, pulled out from the state, losses could potentially amount to about 1.4 million tonnes of palm oil amounting about RM3.5 billion.
Masing said looking for buyers for the excess palm oil was no problem as there was strong demand from China and India.
Wilmar's largest shareholders include Perlis Plantations Bhd, HSBC, Citibank and Morgan Stanley Asia.
The Wilmar decision, Masing said, nonetheless would have an impact on Sarawak as it would affect the state's poverty eradication programme in rural areas.
Nearly 18,000 smallholders are participating in the poverty eradication programme and their estimated annual return per hectare from their oil palm smallholding is RM3,328 or RM227 per month.
Some 41 mills, which supply CPO to Wilmar, would also be affected.
“Because of that we take the matter very seriously.
“We will not negotiate with Wilmar or anybody else on our oil palm policy. The wellbeing and livelihood of our rural people are not up for negotiation.” – February 14, 2014.
~ The Malaysian Insider