KUALA LUMPUR (March 11): Maybank Investment Bank (Maybank IB) maintained its 'neutral' rating for the plantation sector, and said the sector had played its part in ensuring food security, job security, and health security not just for the nation, but the world over during the Covid-19 pandemic.

In a sector update on Monday, the research house said despite rising cost challenges and falling output, the sector still made huge monetary contributions of more than RM23 billion over the past four years in various forms of direct and indirect taxes, and contributions.

Maybank IB said that between 2020 and 2023, the plantation sector contributed approximately RM6.1 billion in windfall profit levy, RM3.7 billion in export duties, RM1.3 billion in Malaysian Palm Oil Boar cess, RM200 million in prosperity taxes, more than RM6 billion in Sabah and Sarawak sales taxes (Maybank IB’s back-of-the-envelope estimates), and easily more than RM6 billion in corporate income taxes and individual taxes (by the smallholders) to the Malaysian government for a selected list of corporates.

“The sector is said to be among the highest tax contributors in terms of total taxes (including the windfall profit levy, export duties, Cess, and Sabah and Sarawak sales taxes, in addition to corporate taxes),” it said.

Maybank IB said palm oil holds more than 50% market share in the global vegetable oils trade.

Hence, the research house said its continuous availability is crucial to global food security as well as health security.

It said throughout the pandemic, palm oil exports never stopped, as the government allowed palm oil cultivation to proceed.

“Besides food use, the continuous availability of palm oil and palm products also meant there were the much-needed ingredients to make personal cares and cleaning products, such as hand wash, soap, laundry detergents, hand sanitisers, etc, which the world desperately needed in its fight against the highly infectious Covid-19 virus,” it said.

Maybank IB highlighted that during the pandemic, the plantation sector was among the few granted special approval by the government to operate.

It said social distancing at the workplace was inherent in the estates, given that one worker typically covers more than 10 hectares of estates, providing a naturally safe working environment.

The research house said that at the height of the pandemic, outsiders had limited access to the staffs’ housing quarters and estate operations to ensure the safety of their workers and families.

“While country borders were mostly closed initially, guest workers remained employed throughout, and were paid decent wages (plus incentives) that allowed them to repatriate the much-needed income to provide for their families back home (presumably equally affected by the pandemic),” it said.