Malaysian Market For Sago Palm

Malaysian Market For Sago PalmIn this chapter, we provide address the stress of Malaysia market for sago. The discussion of the market harps of production, consumption, export and expense. To infrastand about sago, we will eldest briefly discuss on sago palm, sago stiffen and sago treat.1.1 Sago PalmSago palm or Metroxylon sagu is a crop that produces stiffen for victuals and non- aliment affect industries. Sago palm is widely cultivated in Sarawak with more than 60,000 hect are of eye socket recently. Commercial polish field of force for sago palm was increase from 43 hectare in 1988 to 10,700 hectare in 1996 and the remaining was cultivated by smallholders. In social class 2000, there are 21 sago affect jells which produced around 60,000 atomic be 109 of sago amylum. In west Malaysia, sago palm civilisation is withal small with however 2 sago processing plant operated in Johor.1.2 Sago stiffenMost of sago stiffen that been produced in Sarawak is used in we st Malaysia (almost 30,000 thyroxin). Sago overly been exported as high quality food for thought topical anestheticise amylum and low quality assiduity govern starch. exporting for food step starch was change magnitude from 3,600 tonne in 1985 to 11,000 tonne in 1995 while export for indus quiz grade starch was fall from 8,400 tonne in 1985 to 5,100 tonne in 1995. The major destinations for sago starch export are Japan, Singapore, United Kingdom, Taiwan, Canada, southwestern Korea, bran-new Zea field and Thailand.1.3 Sago touchSago PalmSago palm took 10 to 15 days to be matured. When sago palm is matured, it will be felt passel so that its physical anatomical structure can be cut. Sago palm has a spacious remains, upright, r from each unrivalledes a height of 10-12 meters, with the contents of the soft and contain high starch content. It is a staple food source for indigenous people in Sabah and Sarawak, including ethnic Bisaya, and Melanau.Sago LogSago trunk is cut into section with each section is 75 cm to 90 cm long. This section is known as sago log. Every sago trunk ease up around 10 to 12 sago log. Then, these sago logs will be tied together in the multifariousness of rafts and tugged by boats to sago processing plant through river. Sometimes, these sago logs are carried by lorry to sago processing plant.Processing Sago StarchProcessing of sago starch is through in the sago processing plant. In the sago extraction process, the sago logs are first debarked, followed by maceration utilise a rasper. Newer types of raspers crap eliminated the need for debarking. The sago chips resulting from the maceration process are and then further disintegrated exploitation a hammer mill. The starch slurry is then passed through a series of outward-moving sieves to remove the coarse fibres. Cyclone separators are then used to extract the starch which is then dried using a rotary vacuum drum drier, followed by hot air drying.1.4 Malaysia Mark et for Sago first department of Agriculture, Sarawak. unpolished Statistics of SarawakFrom table 1.4, we can fulfil how the instruction and the status of sago industries in Malaysia were. The number framing shows repulsion in the export of sago starch forevery single year. Thus, it is influenced by the current economic climate.We can see that the figure of the add up export of sago starch are not really consistence compared to its price which is leaving high all the appearance breaking from the year of 1993 until it reaches its highest price in the year 1998. The year after, the figure shows that the price is going down. Even though, the full(a)ity of production was increase in 2002 and 2003. The lowest price ever was in year 1993 where it was only around RM584 per tonne for industry grade starch and RM596 per tonne for food grade starch. The highest price was RM915 per tonne for industry grade starch and RM 897 food grade starch in the year 1998 a year after the economi c erosion occurs.From the view of total export step and production, Malaysia produced the highest quantity of sago starch back in the year 1995 where it reaches its highest possible production with exported quantity up to 45,130.96 tonne for food grade starch and 4,816.43 tonne for industry grade starch. The lowest total production was in the year 1997 where only 27,285.50 tonne of food grade starch and 5,121.83 tonne of industry grade starch were exported the same year when the economic erosion occurs.If referred to the net export revalue, the biggest amount is during the sago price recorded its highest price which is in year 1998. The amount is RM5, 638,142. Meanwhile, the lowest export value was in year 1993 with the net total of export value is RM2, 314,787.CHAPTER 2 CURRENT POLICIES DESCRIPTION2.0 IntroductionThis chapter will discuss the agricultural policies relevant to sago providing an accurate, clear understanding of the policies affecting the market for sago and its pro duct. There are 4 policies that relevant to sago consist of policies by the Malaysia governing (federal) and Sarawak government (state).2.1 Sarawak Policy on Sago orchard (Before NAP3)The Sarawak government is trying to pioneer the refinement of sago on a plantation scale, trying to tap 20th century agricultural technology and big organisational structure to grow this supposedly wonder crop. The aim of sago plantations is the application of modern, scientific agricultural technology and a big unveilingal organisation, to exploit the cultivation of sago that has thus far been cultivated in a very naif and semi-wild fashion.This is the first attempt at growing sago on a plantation scale anywhere in the universe of discourse. Since the clone material and plantation technology for sago palm conduct not been established by surreptitious entrepreneurs, Sarawak government had wear outed the policies to cultivate sago palm on a plantation scale. With proper drainage, maintenance a nd fertiliser in plantation, sago palm will mature faster. This will increase the productivity of sago palm which return starch to the topical anaesthetic and international market.2.2 Third National Agricultural Policy (NAP3) on Sago (1998-2010)In NAP3, sago is fallen under the group of innovative product and future industries. The form _or_ system of government objective for this group isTo break up innovative products and new industries which will provide source for the information of land in the futureThe strategies for this insurance areTo modify the economy baseTo generate and encourage private sector participationTo reduce cost and increased productivity, commercial sago cultivation in large scale by private sector has been promote. This has been done completely by private sector and in collaboration with government subsidiaries. Infrastructures and basic facilities have been provided by the government to support the production of sago by private sector. Furthermore, cultivation with high quality seeds and better agronomy practices has been done to increase the productivity of sago smallholders.Sago cultivation has been encouraged on peat soil area in Sarawak due to the adequate of this crop with peat soil. This is the best way to use peat soil area in natured way. Production of value-added sago based products have been implemented to wider the market opportunities. The products include modified sago starch, sorbitol, dextrin and ascorbic acid. look into and development on both upstream and downriver activities for sago has been strengthen. The activities includeBreeding high quality crops materialFarm managementProcessing technologyNew products developmentUsage of side products including wasted materials and sago scrapsSago smallholders have been encouraged to wider their nurture through institution support. Research and market encouragement for sago starch and another(prenominal) sago products have been stressed due to strengthen the br ea social function market and venture the new market. Sago processing plants have been encouraged to practice quality watch management. investment and strategic raw material gain for upstream industry has been encouraged. This is to sustain the supply of sago in the industry. To control the wasted materials and sago scraps, pollution control management has been implemented.2.3 Sarawak Policy on Sago (Based on NAP3)Sarawak Policy on Sago has been formulated, think and developed from NAP3 by Ministry of Modernisation of Agriculture Sarawak (MoMA). The policy is for sago starch-based product industry as a electric potential industry and sago as a crop industry.For sago starch-based product industry as a potential industry, the policy objective isTo explore new frontier industry which might have substantial return to the local producers and the economyThe strategies for this policy areTo encourage private sector participationTo intensify research and development on sago starch prod uct developmentFor sago as a crop industry, the policy objective isTo develop and expand sago industry and exploit the opportunities of market of sago and sago starch-based productsThe strategies for this policy areTo assist smallholder in planting sago using mini estate approachTo encourage private sector participation in planting and processing of sago2.4 Ninth Malaysia Plan Policy on SagoUnder the Ninth Malaysia Plan, sago is one of the crops that included in land consolidation and rehabilitation. Land consolidation and rehabilitation will be continued on a big scale to accelerate the modernisation of smallholdings as well as increase productivity of the crops.CHAPTER 3 physical objectObjectiveTo determine Sago cultivation area in SarawakTo determine policy implication on Sago industry in SarawakTo determine the changes of policy in Sago industryCHAPTER 4 POLICY ANALYSIS4.0 IntroductionIn this chapter, we will consider the effects of policy that have been discussed in the prev ious chapter. The policy that we will analyze here is the Sarawak Policy on Sago based on NAP3.4.1 Effects on Sago finishing Area harmonise to Chew, Abu Hassan Isa and Mohd. Ghazali Mohayidin (1999), the aim of sago plantations is the application of modern, scientific agricultural technology and a large-scale institutional organisation, to exploit the cultivation of sago that has thus far been cultivated in a very primitive and semi-wild fashion. With commercial planting on large scale have been encouraged through the policies, the sago cultivation area was increased. The estimated area for sago cultivation in 1998 is 45,000 ha and it increased to 60,700 ha in 2000 (Third National Agricultural Policy, 1998)Since year 2000, the estimated area for sago cultivation in Sarawak is over 60,000 ha and slowly increased from year to year. The increment of sago cultivation area in Sarawak from year 2000 to 2004 is shown as below (Ministry of Modernisation of Agriculture Sarawak, 2005). year2 0002001200220032004Hectares (ha)60,70961,52362,14163,05362,308% compared to other crops7.87.67.37.16.7Table 4.1 Estimated Area for Sago CultivationSource Ministry of Modernisation of Agriculture Sarawak, 2005Even though the area for sago cultivation is increased in term of hectares, precisely in term of percentage compared to other crops, sago cultivation is decreased. The policies might be effective to increase the area of sago cultivation, but the increment is rather too slow compared to other crops especially oil palm.Figure 4.1.1 Sago Cultivation Area in SarawakSource Ministry of Modernisation of Agriculture Sarawak, 2005Figure 4.1.2 Percentage of Sago Cultivation Area Compared to some other Crops in SarawakSource Ministry of Modernisation of Agriculture Sarawak, 20054.2 Effects on Sago Starch Export and Starch consequenceThe highest sago starch export was in 1998 with 46,518.43 tonne of sago starch was exported and the value of it was RM41, 855,722 with price per tonne is R M897 for food grade starch and RM915 for industry grade starch (Craun Research Sdn Bhd, 2004). After 1998, the sago starch export decreased making the worst export value was in year 2000 with only 36,382.78 tonne was exported and the value of it was RM29,782,916 with price per tonne is RM830 for food grade starch and RM766 for industry grade starch. This might be derived from the price drop of starch in world market.The effects of the policies were only been seen after year 2000 where the export value of sago starch increased every year starting from year 2001 to 2004. Only in year 2003, the export value was decreased by RM55,000. The export value of sago starch from year 1998 to 2004 is shown as below (Ministry of Modernisation of Agriculture Sarawak, 2005).Year1998199920002001200220032004Export Value(RM000)42,18236,45029,78330,68032,16532,11037,020Table 4.2.1 The Export Value of Sago StarchSOURCE Ministry of Modernisation of Agriculture Sarawak, 2005 bit exporting sago starch, Mal aysia still has to merchandise other starch due to local consumption. In year 1997, estimated total production of sago starch in Malaysia is 60,000 tonne with almost 30,000 was used for local consumption (Third National Agricultural Policy, 1998). In 1998, the import value of starch was RM552,000 made it was the highest import value for starch.With local demand for starch is good for food and non-food industries, the policies were able to support the supply of starch in local market. It helps to reduce the import value of starch in 1999 to RM55,000. From this year, the import value of starch per year was going up and down where in year 2000 there is no starch was imported. The import value of starch from year 1998 to 2004 is shown as below (Ministry of Modernisation of Agriculture Sarawak, 2005).Year1998199920002001200220032004Import Value(RM000)552551340457157Table 4.2.2 The Import Value of StarchSource Ministry of Modernisation of Agriculture Sarawak, 2005Figure 3.2 Export Value of Sago Starch and Import Value of Starch from 1998 to 20044.3 Effect on Sago Research Involvement accord to Chew, Abu Hassan Isa and Mohd. Ghazali Mohayidin (1999), there was no private group and only two government centres persisting out research on sago in Malaysia. Researches on sago are of import to avoid the extinction of sago industry in Malaysia.When the policies were implemented, Land handcuffs and Development Authority of Sarawak (PELITA) have formed Craun Research Sdn Bhd to carry out research and development on sago. Craun Research Sdn Bhd was once lead by former Sarawak MARDI Director, Mr. Yusup Bin Sobeng.The policies also encouraged local universities to carry out research on sago. With UPM already carry out researches on sago before the policies UNIMAS have coupled them to do more researches on sago. Recently on 4 August 2006, UNIMAS signed an MOU with New deoxycytidine monophosphate Fermentation Research Co. Ltd. (NECFER) of Fukoka to enable both institutions t o cooperate and collaborate in the establishment of the fermentation parameters and structural set-up in a joint research and development endeavour on sago starch fermentation for large-scale production of ethanol and lactic acid.4.4 Effects on Private Sector Involvement in Sago PlantationPresently, sago is great(p) in Sarawak as a smallholders crop (Chew, Abu Hassan Isa and Mohd. Ghazali Mohayidin, 1999). When Land Custody and Development Authority of Sarawak (PELITA) started the development of two sago plantations Dalat Sago Plantation and Mukah Sago Plantation, several private companies in Sarawak got the initiative to involve in sago industry. With the policy encouraged private sector participation in planting and processing of sago, the numbers of private companies involve in sago plantation and processing had increase.Now, private companies which involve in sago industry have their own association for the benefits of members in the industry. Sarawak Sago Manufacturers Associ ation is the well known sago companies association in Sarawak. It is joined by inheritable Seng Ngeng Sons Sago Industries Sdn BhdNitsei Sago Industries Sdn BhdSong Ngeng Sago Industries (EM) Sdn BhdC. L. Nee Sago Industries Sdn BhdGrand Safeways (S) Sdn BhdIgan Sago Industries Sdn Bhd4.5 Effects on Traditional Sago Starch ProductionBefore the policy was introduced, there were 11 modern sago processing plants in Sarawak which had fixed assets and equipment valued around RM2-RM5 one thousand thousand (Chew, Abu Hassan Isa and Mohd. Ghazali Mohayidin, 1999). The policy helps to increase this number to 21 modern sago processing plant in year 2000. The increasing number of modern sago processing plant had slowly replaced the production of traditional sago starch called lemantak with high quality, dry sago flour.4.6 Effects on Sago Starch Contribution in World Starch MarketIn the world market, sago starch has to compete with other starch such as maize starch, potato starch, manioc star ch and wheat starch. According to ISO skillful Committees (2005), the world starch output was estimated to be 48.5 million tons in year 2000. Below is the total export value (in USD) for starches in world market based on type of starches between years 2000 to 2002 (ISO Technical Committees, 2005).200020012002Wheat Starch79,299,18866,494,94571,158,617Maize Starch247,354,215254,598,496250,744,561Potato Starch186,513,628192,451,543189,591,770Cassava Starch155,221,419146,818,27027,307,528 other Starch44,592,79242,295,98342,245,903Table 3.6 Export Value (USD) for Starches in World MarketSource ISO Technical Committees, 2005 another(prenominal) starch in table 3.6 refers to barley starch, rice starch, sago starch and waxy xaize starch. Though the export value of other starch is decreased from year 2000 to 2002, it was only 5% reduction compared to 82% reduction of cassava starch. However, the percentage or reduction for other starch including sago starch is higher than wheat starch, maiz e starch and potato starch.The policy to develop and expand sago industry in Malaysia helps to make Malaysia been acknowledged as one of the main exporter for starch in the world market. Malaysia also been acknowledged as the highest sago starch exporter in the world (ISO Technical Committees, 2005).CHAPTER 5 POLICY IMPLICATIONSThis chapter will discuss the positive and negative aspects of the policies analyzed in the previous chapter. The discussion demonstrates a close relationship between the analysis in the previous chapter and the implications drawn in this chapter about the positive and negative aspects of the policies analyzed.5.1 Positive AspectsFirst positive aspect, the policies embroil the sago cultivation to be increased. With 1.69 million hectares of peat soil in Sarawak, the policies had increased the sago cultivation area. This was due to the encouragement of private sector participation in sago plantation and the assistant of smallholder in planting sago using mini estate approach. Private sectors will not just focusing to oil palm plantation in term of the land usage in Sarawak. Even though sago is less profitable compared to oil palm, the policies which imply government support in sago cultivation helps to involve private sector in sago cultivation.Second positive aspect, the policies implicate the export and import of starch in Malaysia. With current consumption of starch in Malaysia is estimated around 100,000 tonne per year, the policies help to increase the supply of starch for local consumption. More than half of sago starch is been exported because of its high value as food grade starch and industry grade starch. This is more profitable than using it for local consumption. However, the usage of sago starch for local consumption still can support the local demand where the import value of starch in Malaysia is far too small (below RM80,000 from year 2001) compared to the export value of sago starch.Third positive aspect, the policies im plicate the sago researches troth in Malaysia. The policies help to increase the number of government subsidiaries and private group involvement in sago researches and development. The researches for the most part focus on increasing its starch yield, reducing the gestation period of sago and reducing the cost of sago production. quaternate positive aspect, the policies implicate the income of sago smallholders. With most of sago palm is cultivated by smallholders, the policies help to increase their income. Most of sago farmers are having income from non-sago agricultural activities or from off-farm employment. This is because sago palm has the gestation period of 10 to 15 years which considered as too long to generate income. The policies are focusing on economic strategies in planting sago at farm level where the farmers can maximize the profit in sago cultivation.Fifth positive aspect, the policies implicate the collaboration between federal government and state government. Wi th agriculture as the third instrument to generate Malaysias economy, the policies play an important role in developing the abundant crop such as sago. The federal government creates policies to develop sago cultivation for the state government. Then the state government will innovatively formulate, plan and develop the policies to be implemented. The policies consist of budget and land for sago cultivation.Finally, the policies ensured sago not to be abundant and will be developed to support the agriculture industry as well as other industries in Malaysia.5.2 Negative AspectsFirst negative aspect, the policies implicate the manipulation of private companies in sago industry. Most of private companies that involve in planting and processing sago have their own association to protect their importance in the industry. They might control the price of sago section (sago trunk which is cut to yield its starch) and the fee for transportation to factories. When this happened, the sago smal lholders might gain small profit or flush worst they gain loss.Second negative aspect, the policies implicate the traditional value of sago processing. With the number of modern sago processing plant is increased, the traditional, small-scale cottage mills which produce a type of inferior wet sago called lementak for the local markets are slowly being wiped out. The Melanau community especially will slowly lose their traditional way in processing sago.Finally, the policies are considered not very effective in developing sago industry. This can be seen in the small increment of sago cultivation area for the past 5 years compare to other crop in Malaysia.CHAPTER 6 CONCLUSIONSEven though, sago is considered by many plant scientists, especially Japanese scientists, as the starch crop of the 21st century (Jong, 1995), the present method of cultivation of sago palm shows that it is currently grown using very primitive agricultural technology. Sago is at present grown essentially as a sma llholder crop, producing low yields with minimal maintenance and zero fertilization. Current methods of cultivation in Sarawak is not that much diametric from what had occurred through the millennium and what is occurring now in the virgin, unexplored jungles of Papua New Guinea.The policy was implemented and sago industry also given impotency in Sarawak region. The cultivation area was showing increment and the yield as well, at the same time Malaysia market and world market for sago also increase. We found every policy try their level best to develop the sago industry from cultivation up to market it. Now they also start focus in research and development (RD), which will improve the sago industry.The sago plant lot of RD, to improve the plant and make it more economically profit. In sago industry there need two important thing need to improve. Make sure the plant produce high starch or high yield and decrease the gestation period that is from 10 to 15 years to 5years. The yield c an be modify by good plant materiel and good plant demeanor as well. This can only be achieved by a prolonged, sustained research program in plant selection and breeding work. The spectacular improvements in the yield of oil palm and its maturity period in Malaysia were achieved by a similar long-term research program, undertaken by a wide variety of governmental and private groups, set-back in the 1900s (Hartley, 1967).Unfortunately, there are currently no private groups carrying out research on sago in Malaysia. In fact, there are now only two government centers, the Dalat Sago Research Station and CRAUN (Crop Research and Application Unit, Lembaga Pembangunan dan Lindungan Tanah, Sarawak or PELITA), carrying out research on sago cultivation. The amount of research resource devoted to sago is distinctly inadequate for the monumental task of converting sago from its present semi-wild status to a modern clone with high yields, scant(p) maturity periods and responsiveness to fer tilizers. The proper management and good care to sago will improve Sarawak Sago industry and the policy will make the sago as golden crop of Sarawak.