MARKET DEVELOPMENT
CPO Prices To Stabilise Following CPOPC Set-up
CPO Prices To Stabilise Following CPOPC Set-up
23/11/2015 (Bernama) - Crude palm oil (CPO) prices will enjoy greater stability and possibly given a boost in the long-run, following the move by Malaysia and Indonesia to set up the Council of Palm Oil Producing Countries (CPOPC), a commodity market expert said Saturday.
David Ng Heng Soon, a dealer with Phillips Futures Sdn Bhd, said the council would among other things, address impediments to palm oil trade, as well as undertake activities and functions in the interest of the industry for a positive impact on prices.
"While the market does not expect an immediate impact as the collaboration is still in its early stages, in the long-term they (players) are positive that it(the pact) will stabilise CPO prices.
"But, what the market wants to know is how both countries can come up with the mechanism to stabilise prices, either by reducing the stockpile or inventory in the country," he told Bernama when responding to the establishment of the council.
The CPO price currently stands at RM2,089 per tonne.
Malaysia, the second largest producer of the golden crop and Indonesia, the largest, today signed the Charter of the Establishment of the CPOPC, on the sidelines of the 27th ASEAN Summit and Related Summits which ends tomorrow.
Minister of Plantation Industries and Commodities Datuk Amar Douglas Uggah Embas signed on behalf of Malaysia, while Indonesia was represented by Coordinating Minister for Maritime Affairs Dr Rizal Ramli.
The signing ceremony was witnessed by Prime Minister Datuk Seri Najib Tun Abdul Razak and Indonesian President, Joko Widodo.
Indonesia and Malaysia will respectively contribute an initial sum of US$5 million for the operations of the CPOPC.
During a press conference, Uggah pointed out that stabilising the CPO prices was not the main objective of setting up the CPOPC.
Instead, it was to ensure that the palm oil industry would contribute to the economic development and well-being of the people.
"One principle that need to follow is to look at the stock management of both countries," he said.
Meanwhile, Rizal said if stocks are too high, it would not be good for the producing countries.
"We will organise and harmonise stock management and should be able to coordinate it to maintain sustainable prices," he added.
The CPOPC is also aimed at promoting, developing and strengthening cooperation in the oil palm industry among the member countries.
The membership of the council will be extended to all oil palm cultivating countries such as Brazil, Colombia, Thailand, Ghana, Liberia, Nigeria, Papua New Guinea, the Philippines and Uganda.
David Ng Heng Soon, a dealer with Phillips Futures Sdn Bhd, said the council would among other things, address impediments to palm oil trade, as well as undertake activities and functions in the interest of the industry for a positive impact on prices.
"While the market does not expect an immediate impact as the collaboration is still in its early stages, in the long-term they (players) are positive that it(the pact) will stabilise CPO prices.
"But, what the market wants to know is how both countries can come up with the mechanism to stabilise prices, either by reducing the stockpile or inventory in the country," he told Bernama when responding to the establishment of the council.
The CPO price currently stands at RM2,089 per tonne.
Malaysia, the second largest producer of the golden crop and Indonesia, the largest, today signed the Charter of the Establishment of the CPOPC, on the sidelines of the 27th ASEAN Summit and Related Summits which ends tomorrow.
Minister of Plantation Industries and Commodities Datuk Amar Douglas Uggah Embas signed on behalf of Malaysia, while Indonesia was represented by Coordinating Minister for Maritime Affairs Dr Rizal Ramli.
The signing ceremony was witnessed by Prime Minister Datuk Seri Najib Tun Abdul Razak and Indonesian President, Joko Widodo.
Indonesia and Malaysia will respectively contribute an initial sum of US$5 million for the operations of the CPOPC.
During a press conference, Uggah pointed out that stabilising the CPO prices was not the main objective of setting up the CPOPC.
Instead, it was to ensure that the palm oil industry would contribute to the economic development and well-being of the people.
"One principle that need to follow is to look at the stock management of both countries," he said.
Meanwhile, Rizal said if stocks are too high, it would not be good for the producing countries.
"We will organise and harmonise stock management and should be able to coordinate it to maintain sustainable prices," he added.
The CPOPC is also aimed at promoting, developing and strengthening cooperation in the oil palm industry among the member countries.
The membership of the council will be extended to all oil palm cultivating countries such as Brazil, Colombia, Thailand, Ghana, Liberia, Nigeria, Papua New Guinea, the Philippines and Uganda.