13/09/2011 (The Star) - All but one fresh fruit bunches (FFB) performance indicators for palm oil, namely production, stocks, exports and imports, declined in August.

August's crude palm oil (CPO) production eased 4.8% to 1.67 million tonnes, end-August stock lost 5.6% to 1.88 million tonnes, exports fell 2.7% to 1.74 million tonnes and imports dropped 33% to 73,768 tonnes versus July.

The price FFB, however, rose 1.3% to RM33.76 a tonne in August from RM33.33 the previous month.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok, in announcing the Malaysian Palm Oil Board (MPOB)'s palm oil statistics for August, said the stability of the CPO price, which is trading above RM3,000 per tonne, was well supported by lower production and inventory in August.

He pointed out that the lower CPO output last month was mainly attributed to palm fruit harvesters, mainly Indonesian workers, who went home for Hari Raya Aidil Fitri in the final week of August.

Traditionally, August was the peak production month for CPO in Malaysia, Dompok said.

Palm oil inventory in August also eased despite lower exports as most major importing countries like China, Egypt and several other Middle-East nations had increased their imports during the JuneJuly period to replenish their stocks prior to the Hari Raya celebrations.

Another point of interest in the MPOB's August statistics is the higher exports of palm biodiesel by almost 63 times to 13,783 tonnes from just 24 tonnes in July.

According to MPOB director-general Datuk Dr Choo May Yuen, the significant jump in biodiesel exports was due to the strong demand from the European Union at 12,017 tonnes in August compared with only 18 tonnes in July.

On June 1, Malaysia implemented its mandatory B5 biodiesel programme starting with the central region covering Putrajaya, Malacca, Negri Sembilan, Kuala Lumpur and Selangor.

B5 is the blending of 5% biodiesel with 95% fossil fuel diesel.

“Our target is for all petrol stations in Malaysia to be equipped with the B5 facility by the end of next year,” Dompok said.

The B5 biodiesel programme is expected to take up some 500,000 tonnes of CPO, which in turn will help the industry manage its palm oil stock levels.

On the FFB price, Dompok said the higher price was mainly attributed to stronger CPO exports, particularly in the first three weeks of August, as well as expectations of lower inventory. “This saw the local CPO price rising by RM27 to RM3,114.50 a tonne while palm kernel oil increased by RM31.50 to RM1,927.50 per tonne,” he said.