Some of my closer friends bloggers knew that when I started blogging three years ago, I was on a career path change. Some knew that I wanted to try my luck with the plantation business as it was an industry where there is lack of competition and people my age would not even dream of stepping into the industry. Why I blogged then? Because I had plenty of time on my hand when I had to wait for some application processes or S&P.
it was a jolly good time as people that wanted to sell would sell at a fair market value price. It is not the case now where people inflat the price as high as possible. You won’t believe if I said the cheapest land in Johor now is at least RM50,000 per acre even in the deepest of jungle.
So when in recent times, when friends call me to tell me that CPO has finally came down, I said it is a good correction. It doesn’t affect me much as I believe as long as the CPO price is above RM1,600, I will be okay. It is a good correction in that people who are new the industry will think twice about coming in.
In the year 2000, when CPO price was hovering around RM1,000 per metric tonne, most estates were on the brink of bankcruptcy. It was an unsustainable price. Now with CPO peaking at over RM4,500 even PhD holders are coming into the industry. These people come in without proper cost planning and suddenly everything that is associated with palm oil plantation increased in costs. So maybe, in my personal opinion, this correction in price is a good thing.
Editor Note: There was a reader who wrote in to me to ask me to separate this palm oil news and discussion into another blog. As I am already maintaining so many blogs, I don’t know if that will be a good idea. Can more people give me comments on that?
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