MARKET DEVELOPMENT
POTS Philippines 2015 Ends With Mix Views On Palm Oil Price Outlook
POTS Philippines 2015 Ends With Mix Views On Palm Oil Price Outlook
10/08/2015 (Bernama) - The Palm Oil Trade Fair and Seminar Philippines (POTS Philippines 2015) comes to a close today with mixed views on immediate outlook of the palm oil price.
While there were positive views of a price rebound in the near term following a prolong weakness, some delegates were skeptical and felt that it could take a much longer time due to the oversupply of edible oil in the market.
On a positive note, international research organisation ISTA Mielke GmbH executive director Thomas Mielke said as the palm oil price was nearing its bottom, a rebound could come as early as October.
Furthermore, he said the soybean production, oil palm closest competitor, had been rising sharply for the last three years, and similar results were highly unlikely to be repeated this year.
"The trend (low palm oil price) is not going to continue. We just don't know the time and level the price would hit the bottom. Upwards potential could come from as early as October this year till March next year," he said at the two-day POTS Philippines 2015.
On the other hand, Indian vegetable oils trading company Godrej International Ltd director Dorab Mistry was more bearish in his opinion, citing high production cycle of fresh fruit bunches, delayed implementation of biodiesel in Indonesia and low crude oil price were factors dampening the price.
He said fresh fruit bunches production in Malaysia and Indonesia had entered a new high cycle in March and it was expected to last between six and 11 months.
Mistry said the hot and dry El Nino phenomenon also did not come as strong as expected and lack of action for palm oil biodiesel in Indonesia had put more pressure on the building inventory.
He said by the end of the year, Malaysian palm oil stock was expected to reach three million tonnes from two million tonnes at present.
Production in Malaysia and Indonesia is forecast to be at 20 million tonnes and 32 million tonnes, respectively this year while global production is projected to increase by 2.5 million, he added.
Nevertheless, he said demand from India and China, two of the world's largest edible oil consumers, was expected to improve, given the low price of edible oils.
He said India for instance, would see a two-million tonne increase in edible oil imports for the 2014-2015 period, driven by low local production of soybean and rapeseed.
While the palm oil price outlook continues to be debated, the POTS Philippines 2015 saw a renewed push by Malaysia to set up oil palm plantations in the Philippines by linking Malaysian palm oil industry players with Filipino businessmen.
Malaysian Palm Oil Council (MPOC) chairman Datuk Lee Yeow Chor said Malaysia's oil palm plantation was reaching its maturity with a total planted area of 5.39 million hectares and further expansion was highly unlikely to reach six million hectares.
He said as the Philippines shared a fairly similar climate and fertile land to Malaysia, it would make a suitable destination for Malaysian planters to expand their oil palm plantations.
However, he said further assessments on ergonomics, political stability, security and land ownership needed to be carried out first.
He said Malaysia's attempt to set up oil palm plantations in the Mindanao over 20 years ago met a dead end due to several factors, including land ownership and security on the island.
A speaker from the Philippines Department of Trade and Industry, Breilgo O Pagaran said the country's demand for palm oil would continue to grow with imports of palm oil expected to reach one million tonnes in 2017 from 600,000 tonnes at present.
The projection showed the growing importance of palm oil in the Philippines and huge potential of palm oil industry expansion in the country.
He said while Mindanao remained the best location for oil palm cultivation due to land suitability and proximity to the equator, any move to set up oil palm plantations would have to come to terms with land ownership issue as most of the land belonged to indigenous tribes.
The birthplace of boxing icon Manny Pacquiao, Mindanao is also known as "The Land of Promise", but it would take much efforts and perseverance to unleash the potentials on the Philippines' second largest island.
Themed "Enhancing Philippines' Oils and Fats Needs through Malaysian Palm Oil", the POTS Philippines 2015 was jointly organised by the MPOC and the Malaysian Palm Oil Board (MPOB).
It was the second time the Philippines hosted the event, which was aimed at developing long and fruitful business relations between Malaysian palm oil industry players and potential users of palm oil from various sectors in the Philippines, since 2012.
While there were positive views of a price rebound in the near term following a prolong weakness, some delegates were skeptical and felt that it could take a much longer time due to the oversupply of edible oil in the market.
On a positive note, international research organisation ISTA Mielke GmbH executive director Thomas Mielke said as the palm oil price was nearing its bottom, a rebound could come as early as October.
Furthermore, he said the soybean production, oil palm closest competitor, had been rising sharply for the last three years, and similar results were highly unlikely to be repeated this year.
"The trend (low palm oil price) is not going to continue. We just don't know the time and level the price would hit the bottom. Upwards potential could come from as early as October this year till March next year," he said at the two-day POTS Philippines 2015.
On the other hand, Indian vegetable oils trading company Godrej International Ltd director Dorab Mistry was more bearish in his opinion, citing high production cycle of fresh fruit bunches, delayed implementation of biodiesel in Indonesia and low crude oil price were factors dampening the price.
He said fresh fruit bunches production in Malaysia and Indonesia had entered a new high cycle in March and it was expected to last between six and 11 months.
Mistry said the hot and dry El Nino phenomenon also did not come as strong as expected and lack of action for palm oil biodiesel in Indonesia had put more pressure on the building inventory.
He said by the end of the year, Malaysian palm oil stock was expected to reach three million tonnes from two million tonnes at present.
Production in Malaysia and Indonesia is forecast to be at 20 million tonnes and 32 million tonnes, respectively this year while global production is projected to increase by 2.5 million, he added.
Nevertheless, he said demand from India and China, two of the world's largest edible oil consumers, was expected to improve, given the low price of edible oils.
He said India for instance, would see a two-million tonne increase in edible oil imports for the 2014-2015 period, driven by low local production of soybean and rapeseed.
While the palm oil price outlook continues to be debated, the POTS Philippines 2015 saw a renewed push by Malaysia to set up oil palm plantations in the Philippines by linking Malaysian palm oil industry players with Filipino businessmen.
Malaysian Palm Oil Council (MPOC) chairman Datuk Lee Yeow Chor said Malaysia's oil palm plantation was reaching its maturity with a total planted area of 5.39 million hectares and further expansion was highly unlikely to reach six million hectares.
He said as the Philippines shared a fairly similar climate and fertile land to Malaysia, it would make a suitable destination for Malaysian planters to expand their oil palm plantations.
However, he said further assessments on ergonomics, political stability, security and land ownership needed to be carried out first.
He said Malaysia's attempt to set up oil palm plantations in the Mindanao over 20 years ago met a dead end due to several factors, including land ownership and security on the island.
A speaker from the Philippines Department of Trade and Industry, Breilgo O Pagaran said the country's demand for palm oil would continue to grow with imports of palm oil expected to reach one million tonnes in 2017 from 600,000 tonnes at present.
The projection showed the growing importance of palm oil in the Philippines and huge potential of palm oil industry expansion in the country.
He said while Mindanao remained the best location for oil palm cultivation due to land suitability and proximity to the equator, any move to set up oil palm plantations would have to come to terms with land ownership issue as most of the land belonged to indigenous tribes.
The birthplace of boxing icon Manny Pacquiao, Mindanao is also known as "The Land of Promise", but it would take much efforts and perseverance to unleash the potentials on the Philippines' second largest island.
Themed "Enhancing Philippines' Oils and Fats Needs through Malaysian Palm Oil", the POTS Philippines 2015 was jointly organised by the MPOC and the Malaysian Palm Oil Board (MPOB).
It was the second time the Philippines hosted the event, which was aimed at developing long and fruitful business relations between Malaysian palm oil industry players and potential users of palm oil from various sectors in the Philippines, since 2012.