MARKET DEVELOPMENT
Better Year for Palm Oil Seen
Better Year for Palm Oil Seen
25/01/2014 (Daily Express) - The Malaysian palm oil industry is expected to improve on its performance this year compared with 2013, supported by expected higher production and stronger demand from export destinations, and the use of biodiesel.
In 2013, the industry had improved in terms of volume, but decreased in value terms compared to 2012. This was mostly due to lower crude palm oil (CPO) prices as well as export prices on palm oil products.
Malaysian Palm Oil Board (MPOB) director-general Datuk Dr Choo Yuen May said CPO production is expected to increase to 19.5 million tonnes due to the recovery in the fresh fruit bunch yield performance, coupled with the increase in new mature areas coming into production and the assumption of normal weather.
"The mature area is expected to increase to 4.71 million ha and the immature area to 0.74 million ha," she said when presenting at the Palm Oil Economic Review & Outlook Seminar 2014.
Last year, CPO production stood at 19.21 million tonnes.
The CPO price is expected to be firm this year, due to increasing palm oil demand from major importing countries due to the continued CPO price discount vis-a-vis soybean oil and rapeseed oil, although the discount may narrow slightly, she added.
She, however, declined to specify the CPO price forecast.
Last year's CPO price averaged RM2,371 per tonne, a 14.2pc drop from 2012's average price.
Increased palm oil demand for biodiesel is expected to support CPO prices too.
In terms of export, the volume has been projected at 18.5 million tonnes this year compared to 18.12 million tonnes last year.
"This is due to a more stable CPO price projection, following the CPO export tax structure and higher demand from existing major markets like China and India," she said.
On inventory, Choo said the ending palm oil stock level is expected to range between 1.6 million tonnes and 1.8 million tonnes at end-2014.
Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas reiterated that the Government remained committed to introducing measures to assist the upstream and downstream segments of the oil palm sector.
"With the implementation of the new CPO export duty structure effective Jan 1 last year, exports of Malaysian palm oil have shown an increase in volume, especially processed palm oil," he said in a speech presented by his deputy at the annual seminar organised by the MPOB.
He pointed out that as part of the CPO supply management mechanism to stabilise palm oil prices, the Government would continue with the implementation of the B5 Programme to promote the use of palm-based diesel as fuel in the country.
"Currently, the B5 Programme has been implemented in the central and southern regions of Peninsular Malaysia, and is expected to be fully implemented nationwide this year.
"We hope to move towards B7 and B10 in the near future."
In 2013, the industry had improved in terms of volume, but decreased in value terms compared to 2012. This was mostly due to lower crude palm oil (CPO) prices as well as export prices on palm oil products.
Malaysian Palm Oil Board (MPOB) director-general Datuk Dr Choo Yuen May said CPO production is expected to increase to 19.5 million tonnes due to the recovery in the fresh fruit bunch yield performance, coupled with the increase in new mature areas coming into production and the assumption of normal weather.
"The mature area is expected to increase to 4.71 million ha and the immature area to 0.74 million ha," she said when presenting at the Palm Oil Economic Review & Outlook Seminar 2014.
Last year, CPO production stood at 19.21 million tonnes.
The CPO price is expected to be firm this year, due to increasing palm oil demand from major importing countries due to the continued CPO price discount vis-a-vis soybean oil and rapeseed oil, although the discount may narrow slightly, she added.
She, however, declined to specify the CPO price forecast.
Last year's CPO price averaged RM2,371 per tonne, a 14.2pc drop from 2012's average price.
Increased palm oil demand for biodiesel is expected to support CPO prices too.
In terms of export, the volume has been projected at 18.5 million tonnes this year compared to 18.12 million tonnes last year.
"This is due to a more stable CPO price projection, following the CPO export tax structure and higher demand from existing major markets like China and India," she said.
On inventory, Choo said the ending palm oil stock level is expected to range between 1.6 million tonnes and 1.8 million tonnes at end-2014.
Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas reiterated that the Government remained committed to introducing measures to assist the upstream and downstream segments of the oil palm sector.
"With the implementation of the new CPO export duty structure effective Jan 1 last year, exports of Malaysian palm oil have shown an increase in volume, especially processed palm oil," he said in a speech presented by his deputy at the annual seminar organised by the MPOB.
He pointed out that as part of the CPO supply management mechanism to stabilise palm oil prices, the Government would continue with the implementation of the B5 Programme to promote the use of palm-based diesel as fuel in the country.
"Currently, the B5 Programme has been implemented in the central and southern regions of Peninsular Malaysia, and is expected to be fully implemented nationwide this year.
"We hope to move towards B7 and B10 in the near future."