13/09/2012 (The Sun Daily) - Crude palm oil (CPO) prices are expected to hover around the RM3,000 per tonne level for the remainder of the year as demand for the commodity is still sustainable, said Malaysian Palm Oil Board (MPOB) chairman Tan Sri Shahrir Abdul Samad.

CPO prices are currently hovering below RM3,000 per tonne, but Shahrir believes that prices will strengthen in the near future.

"(In fact,) there are expectations that the price of CPO will surpass the RM3,200 level. There is sustainable demand for palm oil as it is the most efficient vegetable oil and very affordable," he told reporters at a briefing on the upcoming Sustainability and Conservation Efforts by the Malaysian Palm Oil Industry Conference here today.

Shahrir was commenting on analysts' expectation that CPO prices will remain weak in the near term due to a higher stockpile in August.

Palm oil stocks in Malaysia rose 6% month-on-month to a 10-month high of 2.12 million tonnes at end-August, mainly due to higher production.

Nevertheless, Shahrir said planters are still able to enjoy a good margin at current CPO prices. "Palm oil prices were at RM800 per tonne in 2005. Thus, present prices are actually quite high and the industry is comfortable at this level."

On Budget 2013, Shahrir hopes that assistance will be given to smallholders to use more efficient methods to plant or replant their trees, which in turn will increase their yields.

He said smallholders in the peninsula are receiving RM7,500 per hectare under the government's Palm Replanting Scheme for Small Farmers, while smallholders in Sabah and Sarawak get RM9,000 per hectare.

Meanwhile, MPOB will be holding the one-day Sustainability and Conservation Efforts by the Malaysian Palm Oil Industry Conference on Sept 18 in Sydney, Australia.

Shahrir said claims have been levelled against palm oil in the Australian media and the conference will address some of these concerns.

"We intend to paint a genuine and transparent picture of the oil palm industry to address the unsubstantiated claims and assure them of the sustainability and conservation efforts in the palm oil industry in Malaysia," he added.