12/6/2004 GULF NEWS - Malaysian exports of crude palm oil to the Gulf arerising strongly as a result of high demand and awareness of the benefitsof palm oil compared to other oils, official figures show.

Experts project stronger growth in coming years.

Exports of crude palm oil (CPO) to the six Arab Gulf states and Yemenincreased to 6,191 million tonnes in 2003 from 4,437 million in thepreceding year.

"Based upon rising demand, a friendly price structure and awareness of themany industrial and nutritional benefits of CPO compared to other oilseeds, export trends are on the increase in the Arab Peninsula and Gulfstates," said Bill Wermine, fund manager for Phillip Capital Management inKuala Lumpur.

"Export growth to the Gulf markets is outpacing other traditional exportmarkets such as China, India, Pakistan and the European Union," he toldGulf News.

Wermine, also an author, is currently in the UAE conducting technicalanalysis and swing trading seminars.

The outlook for exports to this region from Malay-sia, the world's largestCPO producer, is "good" as demand is picking up fast, with prices holdingsteady and importers allowed to hedge prices.

Importers benefit

"A benefit to importers of crude palm oil is the very active crude palmoil futures market in Malaysia which allows importers to hedge or lock inprices for future needs."

Citing figures from the Malaysian Palm Oil Promotion Board, he saidMalaysia's exports of CPO worldwide increased to 10.879 million tonnes in2003 from 10.593 million in 2002.

During the last five months, CPO prices have held steady in the face ofproduction and end stock increases although rising world demand has alsoincreased.

"With the US dollar in a protracted downtrend, CPO prices become even moreattractive," said Wermine.

On the Malaysian ringgit's level against the US dollar, he said: "The oddsfavour the buyers and importers might be advised to lock in prices at thislevel.

"Buyers are further protected by the wide price discount of CPO tocompeting oilseeds, the widest since 2000.

"Based on historic precedents, the discount will narrow."

Regarding possible health concerns, he said there has been no scientificevidence to support a link between CPO and cancer.

"Europe and the UK, which have very strict health and safety criteriaregarding food imports, continue to import crude palm oil, as does theMiddle East, China, India, Pakistan, Russia and a host of othercountries."