Farmers in Malaysia are preparing for a shift in domestic avocado demand as the expanded sales and service tax (SST) will include imported varieties starting July 1. Jamawi Jaafar, an adviser to a Sabah avocado growers’ group, noted, “If prices improve in the local market, more local farmers are likely to venture into avocado farming,” highlighting potential benefits for local producers. Imported avocados currently account for 85% of the market, while Sabah’s avocado farms span about 2,023 hectares.

Locally-grown avocados are priced at approximately $1.70 to $2.10 per kilogram at the farm level, with retail prices potentially reaching $4.20 per kilogram. Stable pricing and government backing could increase farmer confidence and expand domestic production. Jamawi proposed a regulatory board for high-potential produce such as avocados and durian, and suggested clearer strategies for other crops like pineapples and oil palm.

Prime Minister Anwar Ibrahim emphasized that the SST expansion targets higher-income consumers of goods like avocados and cod, aiming to ease pressure on lower-income groups. On June 9, the Treasury confirmed a 5% sales tax on several imported items, including fruits, effective next month. Local produce will remain exempt, a move intended to strengthen domestic agriculture and food security, according to Treasury secretary-general Johan Mahmood Merican.

In Johor, avocado farmer Joni Muhamat Yahya welcomed the 5% tax on imports, noting it could provide a boost to local growers. “This is a good opportunity for me and other avocado farmers to expand our farms on a large scale,” he said.

Source: FMT