MARKET DEVELOPMENT
Need For More Transparent Disclosure of Palm Oil Statistics
Need For More Transparent Disclosure of Palm Oil Statistics
06/08/2013 (The Star) - More often than not, Indonesia, the world’s largest palm oil producer, has come under heavy criticism for its continued inefficiency in providing the exact data on the republic’s palm oil stock, production, oil palm planted area and mature hectarage.
Malaysia, on the other hand, has been praised for its diligence in coming out with timely and efficient palm oil statistics every month via its palm oil custodian, the Malaysian Palm Oil Board (MPOB).
For those unfamiliar with the sector, the palm oil statistics from Malaysia and Indonesia, given their status as the world’s largest crude palm oil (CPO) producers, are vital indicators for global industry players, traders and market analysts alike to plan ahead and better strategise their respective future business dealings.
In fact, international palm oil expert Dorab Mistry of Godrej International has been known to openly criticise Indonesia for its reluctance to provide official data on its palm oil output and stock.
He is reported as saying: “These hidden or hitherto ignored palm oil stocks in Indonesia are one of the key reasons for the dismal performance of the palm oil (price).”
Hence, more importantly, given the continued lacklustre CPO prices this year, there is a need for a more transparent disclosure of palm oil statistics by Indonesia and Malaysia, which account for over 80% of the total global CPO production, say market observers.
Come Aug 14, those in the palm oil industry would be focusing on the MPOB’s latest July palm oil statistics to enable them to gauge future supply and demand trends based on stock availability, production and exports.
In fact, even the Indonesian oil palm players are awaiting the latest Malaysian palm oil statistics to chart their next market direction.
Should the local palm oil inventory come down further in July, this would spell good news for CPO prices to generally pick up. A Reuters survey recently indicated that the inventory of five plantation companies might have dropped 3% to 1.6 million tonnes in July from 1.65 million in June.
Production, however, is expected to rise 10% to 1.56 million tonnes in July from a month earlier – the biggest jump so far this year.
CPO had been under pressure in the first six months of the year, with the average price trading below RM2,320 per tonne. While the efficient plantation companies with a cost of production (COP) of RM1,200 a tonne are still making good margins, new oil palm planters in Sarawak with higher a COP and gearings are suffering at the moment.
Some plantation companies in Sarawak have even temporarily halted or slowed new planting, especially with the current CPO prices having fallen to below RM2,400 a tonne from its peak of over RM4,300 in early 2008.
Similarly, the price of fresh fruit bunches has dropped to around RM450 per tonne from over RM700 previously.
In the spirit of the Eid al-Fitr celebration on Thursday, deputy news editor Hanim Adnan wishes all Muslims in Malaysia “Selamat Hari Raya”, and don’t forget to use palm oil in your chicken and beef “rendang” dishes.
Malaysia, on the other hand, has been praised for its diligence in coming out with timely and efficient palm oil statistics every month via its palm oil custodian, the Malaysian Palm Oil Board (MPOB).
For those unfamiliar with the sector, the palm oil statistics from Malaysia and Indonesia, given their status as the world’s largest crude palm oil (CPO) producers, are vital indicators for global industry players, traders and market analysts alike to plan ahead and better strategise their respective future business dealings.
In fact, international palm oil expert Dorab Mistry of Godrej International has been known to openly criticise Indonesia for its reluctance to provide official data on its palm oil output and stock.
He is reported as saying: “These hidden or hitherto ignored palm oil stocks in Indonesia are one of the key reasons for the dismal performance of the palm oil (price).”
Hence, more importantly, given the continued lacklustre CPO prices this year, there is a need for a more transparent disclosure of palm oil statistics by Indonesia and Malaysia, which account for over 80% of the total global CPO production, say market observers.
Come Aug 14, those in the palm oil industry would be focusing on the MPOB’s latest July palm oil statistics to enable them to gauge future supply and demand trends based on stock availability, production and exports.
In fact, even the Indonesian oil palm players are awaiting the latest Malaysian palm oil statistics to chart their next market direction.
Should the local palm oil inventory come down further in July, this would spell good news for CPO prices to generally pick up. A Reuters survey recently indicated that the inventory of five plantation companies might have dropped 3% to 1.6 million tonnes in July from 1.65 million in June.
Production, however, is expected to rise 10% to 1.56 million tonnes in July from a month earlier – the biggest jump so far this year.
CPO had been under pressure in the first six months of the year, with the average price trading below RM2,320 per tonne. While the efficient plantation companies with a cost of production (COP) of RM1,200 a tonne are still making good margins, new oil palm planters in Sarawak with higher a COP and gearings are suffering at the moment.
Some plantation companies in Sarawak have even temporarily halted or slowed new planting, especially with the current CPO prices having fallen to below RM2,400 a tonne from its peak of over RM4,300 in early 2008.
Similarly, the price of fresh fruit bunches has dropped to around RM450 per tonne from over RM700 previously.
In the spirit of the Eid al-Fitr celebration on Thursday, deputy news editor Hanim Adnan wishes all Muslims in Malaysia “Selamat Hari Raya”, and don’t forget to use palm oil in your chicken and beef “rendang” dishes.