Five years on, the tide has now turned

FIVE years have passed since we first visited Rumah Morgan.

Lots of things have happened during the past five years, from the unexpected change of federal government and the subsequent political turmoil, to the sweeping pandemic that compelled lockdowns across the globe.

Indeed, the period has not been kind for many of us around the world, but behind every dark cloud, there is a silver lining and for the residents of Rumah Morgan, that silver lining has been the rising price of palm oil.

Boon for smallholder planters

After dipping to a 10-year annual average low of US$601 per tonne in 2019, palm oil prices have been steadily increasing, reaching a new high of US$1,776.96 per tonne in March 2022 before settling to the new annual average high of US$1,276 per tonne for that year.

Such growth has been largely driven by rising demands for biodiesel associated with the ongoing Russia-Ukraine war, which broke out in early 2022, and most recently, the Middle East conflicts that began in October 2023.

Having somewhat normalised in 2023 with analysts estimating that the 2023 annual average price would settle at US$980 per tonne, palm oil prices are still looking robust with expectations of them breaching the US$1,000-per tonne mark in 2024 and beyond, due to sustained global biodiesel demand and lower growths in other edible oils caused by extreme weather conditions.

‘Revitalised community’

On our second visit to Rumah Morgan, we again received a warm welcome from the chieftain TR Morgan Sanda and his committee, but this time, we could see a revitalised community.

We were excited to learn that the village finally had piped water installed.

The previous transport issues had been addressed, thanks to the improved earnings from palm oil. Now, the majority of villagers have their own vehicles, with the Hilux pick-up truck being the preferred brand for many.

The population had also grown, but TR Morgan said it was not like it was in the olden days.

“Nowadays, it seems that each household is opting for only two or three children,” he told thesundaypost recently.

‘Helping out’

After a brief tour, we were introduced to a fresh face of the community, Paul Ngadan.

Now in his 30s, he studied at and graduated from SMK Baru in Miri and the National Youth Skills Institute (IKBN) Kuching, years before joining the offshore oil and gas (O&G) industry, where he stayed on for over a decade.

We were rather surprised to see an educated and talented individual such as Paul at Rumah Morgan as the majority of the younger generation from many rural communities would often opt for relocation to the more urban areas seeking better economic opportunities.

Moreover, we were curious as to why he, having been born and raised in urban Miri and worked in a rather ‘well-paying’ sector, would choose to settle in rural Beluru instead.

Recounting his story, Paul said he first met his wife, Jennifer Jarau, back during his IKBN Kuching days where she was also a student. The couple got married in 2009.

Jennifer’s family is among the members of the Rumah Morgan community who are active oil palm planters, tending to around 2,000 trees.

They established their small plantation in 2008 after having secured a plot under the Malaysia Palm Oil Board (MPOB)’s smallholder plantation programme.

Over the years, Jennifer’s family and many other smallholders in the area have experienced some ups and downs, but in recent years following the recovery in palm oil prices, they have also benefitted from the boom.

However, labour shortage has remained a pressing struggle.

“So I decided to resign from my offshore O&G job and live in Rumah Morgan to help my in-laws,” said Paul.

He and Jennifer now handle the managerial and logistics sides of the family business, with Paul dealing with the transportation of harvests and the buying-selling of fresh fruit bunches (FFBs), and his wife overseeing weeding and fertilising of the palm trees.

On average, their operations are able to produce around 30 tonnes of FFB per month, and with the current average FFB price hovering around RM550 per tonne, things have turned out to be quite well for this family.

According to Jennifer, a substantial part of the earnings is reinvested into the plantation in the forms of maintenance including usage of fertilisers and weedicide, replanting and settling the instalment payments for various equipment and machinery.

‘Work party spirit’

Nevertheless, there is still the issue of labour shortage, with many planters struggling with the lower oil extraction rates (OER) due to less-than-optimal harvest timings.

For TR Morgan, he is not too worried though.

“I’m glad that my village continues on with the Iban tradition of ‘gotong-royong’ (work party), which supports and uplifts the community on the whole.

“For the near- to medium-term at least, we can expect palm oil prices and the fortune of smallholder planters to be on the upbeat side, but like everything in life, there are no guarantees.

“It would still be up to all those involved to seek different avenues and solutions to diversify and keep our earnings sustainable.

“Whether they would involve executing the proposal of making oil palms a truly zero-waste crop or targeting other cash crops suitable for this climate, it is up to the smallholder planters to showcase their industrious spirit while maintaining a forward-looking attitude,” TR Morgan said.

Of the 1.56 million hectares of oil palm plantations in Sarawak, 27 per cent or 234,812 hectares belong to smallholders like those in Rumah Morgan.

The total number of smallholders in Sarawak, as estimated by the Malaysian Palm Oil Council (MPOC), stands close to 40,000.

Also noteworthy to mention is 28 per cent of all Malaysian palm oil is produced by smallholding operations.

Malaysia itself is established as the world’s next largest palm oil producer, after Indonesia.

* The final part of the series will be out next Sunday, highlighting the Sekaloh settlement in Niah which, like Rumah Morgan, has also been benefitting from oil palm smallholders’ programme.