JANUARY 8 ― It seems that the economic growth for the country this year looks promising with the rise of commodity price. For instance, the sudden spike in crude palm oil (CPO) price which continues to trade above RM3,100 per tonne could serve as a good start for 2020.
Furthermore, the recent jump in crude oil prices spell good news for Malaysia, increase government’s coffers, thus allowing the country to increase spending.
Nonetheless, this situation is likely to be temporary for reasons. The first was due to the move by Indonesia, Malaysia and Thailand government to increase the blends of diesel and fatty acid methyl esters as part of their mandatory biodiesel policy.
More importantly, the strong buying interest by China and India has risen the price especially after Indian government slashed import taxes on crude and refined palm oil from Southeast Asian countries.
Meanwhile, crude oil price on the other hand rose mainly after surprise attacks at Saudi’s oil facilities last September followed by the fresh round of turmoil in the Middle East by US President against Iran. The continous trade sanction faced by Venezuela which dropped the country’s oil production also played a pivotal role for the rise as well.
In view of this, it is worth noting that the current uptrend of the commodity prices were contributed by global factors.
From this standpoint, the country should get cracking with alternative plans amid external headwinds and uncertainty by diversifying business activities.
Looking forward, the existing business activity should be diversified into untapped business growth. For example, it is timely for plantation sector to explore the development of bamboo industry instead of relying merely on palm oil sector since Malaysia only exported RM9.9 million worth of bamboo products last year compared with the RM288.2 billion of global bamboo market, which means there are huge potential for the country to grab opportunities to tap the growing market.
Therefore, throughout this initiative, it will help the country to generate income and provide benefits for the local business community in future.
* This is the personal opinion of the writer and does not necessarily represent the views of Malay Mail.
