BANGI, Nov 10 (Bernama) -- The current rise in palm oil price is mainlyinfluenced by the bullish soybean market due to shortage of supplyfollowing unfavourable weather in the United States, said Malaysian PalmOil Board's (MPOB) director-general, Datuk Dr Yusof Basiron.

He said this at a press conference after the opening of the seminar on"Lessons to be learnt from the Malaysian palm oil cost of productionsurvey and proposals for strategic cost reduction measures" organised byMPOB.

"We are just taking a ride with soybean oil, it has nothing to do with ourpalm oil supply. As long as soyoil price is high, our palm oil willfollow," he told reporters when asked whether the current uptrend of palmoil price would stay.

He said the country's palm oil stockpile was slighty in access of onemillion tonnes or even less on the back of a 13 million tonne productionthis year.

Last year, the country's production only reached 11.9 million tonnes.

Yusof said the palm oil market was reacting to the poor supply of soyoilbecause it was the closest substitute of soya which led to the increase inprice.

"So what is being projected now is this poor performance of soya is stilllikely to be prevailing in the near future because land used for soyaproduction is also for cereal production," he said.

In relation to that, he said, soya producing countries were in a tightspot with its land distribution because there was also a shortage forcereals like corn and wheat.

"There is now pressure on land availability because stock is low for soyaand cereals in producing countries. So the price in the market is dictatedby the soya/cereal complex," he said.

Disputing industry analyst's opinion on the current hike in palm oilprices, he said, local palm oil was not overpriced because it was stillcheaper after a discount of more than US$100 per tonne compared to soyoil.

At close last Thursday, the benchmark January crude palm oil (CPO) futuresprices on the Malaysia Derivative Exchange (MDEX) was RM1,780 per tonne.

-- BERNAMA