In this chapter, we will discourse the background of Malaysia market for sago. The treatment of the market consists of production, ingestion, export and monetary value. To understand about sago, we will foremost briefly discuss on sago thenar, sago amylum and sago processing.
Sago thenar or Metroxylon sagu is a harvest that produces amylum for nutrient and non-food processing industries. Sago thenar is widely cultivated in Sarawak with more than 60,000 hectare of country late. Commercial cultivation country for sago thenar was increased from 43 hectare in 1988 to 10,700 hectare in 1996 and the remaining was cultivated by smallholders. In twelvemonth 2000, there are 21 sago processing workss which produced around 60,000 metric ton of sago amylum. In west Malaysia, sago thenar cultivation is excessively little with merely 2 sago processing works operated in Johor.
1.2 Sago Starch
Most of sago amylum that been produced in Sarawak is used in west Malaysia ( about 30,000 metric ton ) . Sago besides been exported as high quality nutrient class amylum and low quality industry grade amylum. Export for nutrient class amylum was increased from 3,600 metric ton in 1985 to 11,000 metric ton in 1995 while export for industry grade amylum was decreased from 8,400 metric ton in 1985 to 5,100 metric ton in 1995. The major finishs for sago amylum export are Japan, Singapore, United Kingdom, Taiwan, Canada, South Korea, New Zealand and Thailand.
1.3 Sago Processing
Sago thenar took 10 to 15 old ages to be matured. When sago thenar is matured, it will be felt down so that its bole can be cut. Sago thenar has a immense bole, unsloped, reaches a tallness of 10-12 metres, with the contents of the soft and incorporate a high amylum content. It is a staple nutrient beginning for autochthonal people in Sabah and Sarawak, including cultural Bisaya, and Melanau.
Sago bole is cut into subdivision with each subdivision is 75 centimeter to 90 centimeter long. This subdivision is known as sago log. Every sago bole output about 10 to 12 sago log. Then, these sago logs will be tied together in the signifier of tonss and tugged by boats to sago processing works through river. Sometimes, these sago logs are carried by lorry to sago processing works.
Processing Sago Starch
Processing of sago amylum is done in the sago processing works. In the sago extraction procedure, the sago logs are first debarked, followed by maceration utilizing a rasper. Newer types of raspers have eliminated the demand for disembarking. The sago french friess ensuing from the maceration procedure are so farther disintegrated utilizing a cock factory. The amylum slurry is so passed through a series of centrifugal screens to take the harsh fibers. Cyclone centrifuges are so used to pull out the amylum which is so dried utilizing a rotary vacuity membranophone desiccant, followed by hot air drying.
1.4 Malaysia Market for Sago
Food Grade Starch
Industry Grade Starch
Quantity ( metric ton )
Value ( RM )
Price ( RM/tonne )
Quantity ( metric ton )
Value ( RM )
Price ( RM/tonne )
Table 1.4: Export Quantity, Value and Price for Sago Starch from 1993 to 2003
From table 1.4, we can see how the development and the position of sago industries in Malaysia were. The figure figure shows incompatibility in the export of sago amylum every individual twelvemonth. Thus, it is influenced by the current economic clime.
We can see that the figure of the entire export of sago amylum are non truly consistence compared to its monetary value which is traveling high all the manner get downing from the twelvemonth of 1993 until it reaches its highest monetary value in the twelvemonth 1998. The twelvemonth after, the figure shows that the monetary value is traveling down. Even though, the sum of production was increased in 2002 and 2003. The lowest monetary value of all time was in twelvemonth 1993 where it was merely about RM584 per metric ton for industry class amylum and RM596 per metric ton for nutrient class amylum. The highest monetary value was RM915 per metric ton for industry class amylum and RM 897 nutrient class amylum in the twelvemonth 1998 ; a twelvemonth after the economic eroding occurs.
From the position of entire export measure and production, Malaysia produced the highest measure of sago amylum back in the twelvemonth 1995 where it reaches its highest possible production with exported measure up to 45,130.96 metric ton for nutrient class amylum and 4,816.43 metric ton for industry class amylum. The lowest entire production was in the twelvemonth 1997 where merely 27,285.50 metric ton of nutrient class amylum and 5,121.83 metric ton of industry class amylum were exported ; the same twelvemonth when the economic eroding occurs.
If referred to the net export value, the biggest sum is during the sago monetary value recorded its highest monetary value which is in twelvemonth 1998. The sum is RM5,638,142. Meanwhile, the lowest export value was in twelvemonth 1993 with the net sum of export value is RM2,314,787.
Chapter 2: Current POLICIES DESCRIPTION
This chapter will discourse the agricultural policies relevant to sago ; supplying an accurate, clear apprehension of the policies impacting the market for sago and its merchandise. There are 4 policies that relevant to sago consist of policies by the Malaysia authorities ( federal ) and Sarawak authorities ( province ) .
2.1 Sarawak Policy on Sago Plantation ( Before NAP3 )
The Sarawak authorities is seeking to open up the cultivation of sago on a plantation graduated table, seeking to tap twentieth century agricultural engineering and large-scale organizational construction to turn this supposedly admiration harvest. The purpose of sago plantations is the application of modern, scientific agricultural engineering and a large-scale institutional administration, to work the cultivation of sago that has therefore far been cultivated in a really crude and semi-wild manner.
This is the first effort at turning sago on a plantation graduated table anyplace in the universe. Since the ringer stuff and plantation engineering for sago thenars have non been established by private enterprisers, Sarawak authorities had developed the policies to cultivate sago thenar on a plantation graduated table. With proper drainage, care and fertiliser in plantation, sago thenar will maturate faster. This will increase the productiveness of sago thenar which supply amylum to the local and international market.
2.2 Third National Agricultural Policy ( NAP3 ) on Sago ( 1998-2010 )
In NAP3, sago is fallen under the group of new merchandise and future industries. The policy aim for this group is:
To develop advanced merchandises and new industries which will supply beginning for the development of agribusiness in the hereafter
The schemes for this policy are:
To beef up the economic system base
To bring forth and promote private sector engagement
To cut down cost and increased productiveness, commercial sago cultivation in big graduated table by private sector has been encouraged. This has been done entirely by private sector and in coaction with authorities subordinates. Infrastructures and basic installations have been provided by the authorities to back up the production of sago by private sector. Furthermore, cultivation with high quality seeds and better scientific agriculture patterns has been done to increase the productiveness of sago smallholders.
Sago cultivation has been encouraged on peat dirt country in Sarawak due to the suitable of this harvest with peat dirt. This is the best manner to utilize peat dirt country in natured manner. Production of value-added sago based merchandises have been implemented to wider the market chances. The merchandises include modified sago amylum, sorbitol, dextrin and ascorbic acid.
Research and development on both upstream and downstream activities for sago has been strengthen. The activities include:
Engendering high quality harvests stuff
New merchandises development
Use of side merchandises including otiose stuffs and sago garbages
Sago smallholders have been encouraged to wider their farm through establishment support. Research and market encouragement for sago amylum and other sago merchandises have been stressed due to beef up the bing market and venture the new market. Sago processing workss have been encouraged to pattern quality control direction. Investing and strategic natural stuff addition for upstream industry has been encouraged. This is to prolong the supply of sago in the industry. To command the otiose stuffs and sago garbages, pollution control direction has been implemented.
2.3 Sarawak Policy on Sago ( Based on NAP3 )
Sarawak Policy on Sago has been formulated, planned and developed from NAP3 by Ministry of Modernisation of Agriculture Sarawak ( MoMA ) . The policy is for sago starch-based merchandise industry as a possible industry and sago as a harvest industry.
For sago starch-based merchandise industry as a possible industry, the policy aim is:
To research new frontier industry which might hold significant return to the local manufacturers and the economic system
The schemes for this policy are:
To promote private sector engagement
To escalate research and development on sago amylum merchandise development
For sago as a harvest industry, the policy aim is:
To develop and spread out sago industry and work the chances of market of sago and sago starch-based merchandises
The schemes for this policy are:
To help smallholder in seting sago utilizing mini estate attack
To promote private sector engagement in seting and processing of sago
2.4 Ninth Malaysia Plan ; Policy on Sago
Under the Ninth Malaysia Plan, sago is one of the harvests that included in land consolidation and rehabilitation. Land consolidation and rehabilitation will be continued on a larger graduated table to speed up the modernization of smallholdings every bit good as addition productiveness of the harvests.
Chapter 3: Policy Analysis
In this chapter, we will analyse the effects of policy that have been discussed in the old chapter. The policy that we will analyse here is the Sarawak Policy on Sago based on NAP3.
3.1 Effectss on Sago Cultivation Area
Harmonizing to Chew, Abu Hassan Isa and Mohd. Ghazali Mohayidin ( 1999 ) , the purpose of sago plantations is the application of modern, scientific agricultural engineering and a large-scale institutional administration, to work the cultivation of sago that has therefore far been cultivated in a really crude and semi-wild manner. With commercial seting on big graduated table have been encouraged through the policies, the sago cultivation country was increased. The estimated country for sago cultivation in 1998 is 45,000 hour angle and it increased to 60,700 hour angle in 2000 ( Third National Agricultural Policy, 1998 )
Since twelvemonth 2000, the estimated country for sago cultivation in Sarawak is over 60,000 hour angles and easy increased from twelvemonth to twelvemonth. The increase of sago cultivation country in Sarawak from twelvemonth 2000 to 2004 is shown as below ( Ministry of Modernisation of Agriculture Sarawak, 2005 ) .
Hectares ( hour angle )
% compared to other harvests
Table 3.1: Estimated Area for Sago Cultivation
Even though the country for sago cultivation is increased in term of hectares, but in term of per centum compared to other harvests, sago cultivation is decreased. The policies might be effectual to increase the country of sago cultivation, but the increase is instead excessively slow compared to other harvests particularly oil thenar.
Figure 3.1.1: Sago Cultivation Area in Sarawak
Figure 3.1.2: Percentage of Sago Cultivation Area Compared
to Other Crops in Sarawak
3.2 Effectss on Sago Starch Export and Starch Import
The highest sago amylum export was in 1998 with 46,518.43 metric ton of sago amylum was exported and the value of it was RM41,855,722 with monetary value per metric ton is RM897 for nutrient class amylum and RM915 for industry class amylum ( Craun Research Sdn Bhd, 2004 ) . After 1998, the sago amylum export decreased doing the worst export value was in twelvemonth 2000 with merely 36,382.78 metric ton was exported and the value of it was RM29,782,916 with monetary value per metric ton is RM830 for nutrient class amylum and RM766 for industry class amylum. This might be derived from the monetary value bead of amylum in universe market.
The effects of the policies were merely been seen after twelvemonth 2000 where the export value of sago amylum increased every twelvemonth get downing from twelvemonth 2001 to 2004. Merely in twelvemonth 2003, the export value was decreased by RM55,000. The export value of sago amylum from twelvemonth 1998 to 2004 is shown as below ( Ministry of Modernisation of Agriculture Sarawak, 2005 ) .
( RM’000 )
Table 3.2.1: The Export Value of Sago Starch
While exporting sago amylum, Malaysia still has to import other amylum due to local ingestion. In twelvemonth 1997, estimated entire production of sago amylum in Malaysia is 60,000 metric ton with about 30,000 was used for local ingestion ( Third National Agricultural Policy, 1998 ) . In 1998, the import value of amylum was RM552,000 made it was the highest import value for amylum.
With local demand for amylum is good for nutrient and non-food industries, the policies were able to back up the supply of amylum in local market. It helps to cut down the import value of amylum in 1999 to RM55,000. From this twelvemonth, the import value of amylum per twelvemonth was traveling up and down where in twelvemonth 2000 there is no amylum was imported. The import value of amylum from twelvemonth 1998 to 2004 is shown as below ( Ministry of Modernisation of Agriculture Sarawak, 2005 ) .
( RM’000 )
Table 3.2.2: The Import Value of Starch
Figure 3.2: Export Value of Sago Starch and Import Value
of Starch from 1998 to 2004
3.3 Effect on Sago Research Involvement
Harmonizing to Chew, Abu Hassan Isa and Mohd. Ghazali Mohayidin ( 1999 ) , there was no private group and merely two authorities Centres transporting 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 Custody and Development Authority of Sarawak ( PELITA ) have formed Craun Research Sdn Bhd to transport out research and development on sago. Craun Research Sdn Bhd was one time lead by former Sarawak MARDI Director, Mr. Yusup Bin Sobeng.
The policies besides encouraged local universities to transport out research on sago. With UPM already carry out researches on sago before the policies ; UNIMAS have joined them to make more researches on sago. Recently on 4 August 2006, UNIMAS signed an MOU with New Century Fermentation Research Co. Ltd. ( NECFER ) of Fukoka to enable both establishments to collaborate and join forces in the constitution of the agitation parametric quantities and structural set-up in a joint research and development enterprise on sago amylum agitation for large-scale production of ethyl alcohol and lactic acid.
3.4 Effectss on Private Sector Involvement in Sago Plantation
Soon, sago is grown in Sarawak as a smallholder ‘s harvest ( 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 enterprise to affect in sago industry. With the policy encouraged private sector engagement in seting and processing of sago, the Numberss of private companies involve in sago plantation and processing had addition.
Now, private companies which involve in sago industry have their ain association for the benefits of members in the industry. Sarawak Sago Manufacturers ‘ Association is the good known sago companies association in Sarawak. It is joined by:
Nee Seng Ngeng & A ; Sons Sago Industries Sdn Bhd
Nitsei Sago Industries Sdn Bhd
Song Ngeng Sago Industries ( EM ) Sdn Bhd
C. L. Nee Sago Industries Sdn Bhd
Grand Safeways ( S ) Sdn Bhd
Igan Sago Industries Sdn Bhd
3.5 Effectss on Traditional Sago Starch Production
Before the policy was introduced, there were 11 modern sago treating workss in Sarawak which had fixed assets and equipment valued around RM2-RM5 million ( Chew, Abu Hassan Isa and Mohd. Ghazali Mohayidin, 1999 ) . The policy helps to increase this figure to 21 modern sago processing works in twelvemonth 2000. The increasing figure of modern sago processing works had easy replaced the production of traditional sago amylum called “ lemantak ” with high quality, dry sago flour.
3.6 Effectss on Sago Starch Contribution in World Starch Market
In the universe market, sago amylum has to vie with other amylum such as corn amylum, murphy amylum, cassava amylum and wheat amylum. Harmonizing to ISO Technical Committees ( 2005 ) , the universe amylum end product was estimated to be 48.5 million dozenss in twelvemonth 2000. Below is the entire export value ( in USD ) for starches in universe market based on type of starches between old ages 2000 to 2002 ( ISO Technical Committees, 2005 ) .
Table 3.6: Export Value ( USD ) for Starches in World Market
Other amylum in table 3.6 refers to barley amylum, rice amylum, sago amylum and waxy xaize amylum. Though the export value of other amylum is decreased from twelvemonth 2000 to 2002, it was merely 5 % decrease compared to 82 % decrease of manioc amylum. However, the per centum or decrease for other amylum including sago amylum is higher than wheat amylum, maize amylum and murphy amylum.
The policy to develop and spread out sago industry in Malaysia helps to do Malaysia been acknowledged as one of the chief exporter for amylum in the universe market. Malaysia besides been acknowledged as the highest sago amylum exporter in the universe ( ISO Technical Committees, 2005 ) .
Chapter 4: Policy IMPLICATIONS
This chapter will discourse the positive and negative facets of the policies analyzed in the old chapter. The treatment demonstrates a close relationship between the analysis in the old chapter and the deductions drawn in this chapter about the positive and negative facets of the policies analyzed.
4.1 Positive Aspects
First positive facet, the policies implicate the sago cultivation to be increased. With 1.69 million hectares of peat dirt in Sarawak, the policies had increased the sago cultivation country. This was due to the encouragement of private sector engagement in sago plantation and the helper of smallholder in seting sago utilizing mini estate attack. Private sectors will non merely concentrating to oil thenar plantation in term of the land use in Sarawak. Even though sago is less profitable compared to oil thenar, the policies which imply authorities support in sago cultivation helps to affect private sector in sago cultivation.
Second positive facet, the policies implicate the export and import of amylum in Malaysia. With current ingestion of amylum in Malaysia is estimated around 100,000 metric tons per twelvemonth, the policies help to increase the supply of amylum for local ingestion. More than half of sago amylum is been exported because of its high value as nutrient class amylum and industry class amylum. This is more profitable than utilizing it for local ingestion. However, the use of sago amylum for local ingestion still can back up the local demand where the import value of amylum in Malaysia is far excessively little ( below RM80,000 from twelvemonth 2001 ) compared to the export value of sago amylum.
Third positive facet, the policies implicate the sago researches engagement in Malaysia. The policies help to increase the figure of authorities subordinates and private group engagement in sago researches and development. The researches largely focus on increasing its amylum output, cut downing the gestation period of sago and cut downing the cost of sago production.
Fourth positive facet, the policies implicate the income of sago smallholders. With most of sago thenar is cultivated by smallholders, the policies help to increase their income. Most of sago husbandmans are holding income from non-sago agricultural activities or from off-farm employment. This is because sago thenar has the gestation period of 10 to 15 old ages which considered as excessively long to bring forth income. The policies are concentrating on economic schemes in seting sago at farm degree where the husbandmans can maximise the net income in sago cultivation.
Fifth positive facet, the policies implicate the coaction between federal authorities and province authorities. With agribusiness as the 3rd instrument to bring forth Malaysia ‘s economic system, the policies play an of import function in developing the “ abundant harvest ” such as sago. The federal authorities creates policies to develop sago cultivation for the province authorities. Then the province authorities will innovatively explicate, program and develop the policies to be implemented. The policies consist of budget and land for sago cultivation.
Finally, the policies ensured sago non to be abundant and will be developed to back up the agribusiness industry every bit good as other industries in Malaysia.
4.2 Negative Aspects
First negative facet, the policies implicate the use of private companies in sago industry. Most of private companies that involve in planting and processing sago have their ain association to protect their importance in the industry. They might command the monetary value of sago subdivision ( sago bole which is cut to give its amylum ) and the fee for transit to mills. When this happened, the sago smallholders might derive little net income or even worst they gain loss.
Second negative facet, the policies implicate the traditional value of sago processing. With the figure of modern sago processing works is increased, the traditional, small-scale bungalow Millss which produce a type of inferior moisture sago called “ lementak ” for the local markets are easy being wiped out. The Melanau community particularly will easy lose their traditional manner in treating sago.
Finally, the policies are considered non really effectual in developing sago industry. This can be seen in the little increase of sago cultivation country for the past 5 old ages.