23/6/04 - PALM Oil Refiners Association of Malaysia (Poram) chairman ErKok Leong has called on industry players to produce good quality crudepalm oil (CPO), as this is imperative for the production of good qualityfinished palm products.

He said overseas buyers were now paying greater emphasis, and demandingmore stringent quality requirements, on processed palm oil products.

It is essential that we enhance our image as a quality conscious producer,he told participants at a Poram course, Refineries' crude palm oilpurchase, hedging contractual and its operational aspects, in Subang Jayayesterday.

He noted that, after 20 years of discussion, Poram and the Malaysian PalmOil Association (MPOA) had recently reached agreement for the inclusion ofthe Deterioration of Bleachability Index (Dobi) value in the domestic CPOsales contract.

On top of the Dobi value, Poram and MPOA have also agreed on an amendmentto the adjustment basis pertaining to moisture and impurities. The twodevelopments signified a great milestone for the palm oil industry, addedEr.

Malaysian production of CPO this year is forecast at 13.5 million tonnesto 13.7 million tonnes.

Er said Malaysia, which had a refining capacity of about 16 milliontonnes, was capable of refining all its CPO, and exporting almost all theprocessed palm oil products.

Meanwhile, MPOA chief executive M.R. Chandran said the price of CPO stillhad potential to rise further in view of anticipated production shortfallin major producers Malaysia and Indonesia as well as continued demand forthe commodity.

Although the current CPO price has dropped to RM1,500 per tonne, I believethere is room for increase. All will depend on the production situationand South American soya bean harvest.

Malaysia's production in the first six months of the year was lower thanin the corresponding period last year. Indonesia, which is expected toproduce 11 million tonnes to 11.2 million tonnes annually, will probablyproduce 10.5 million tonnes this year.