4/23/2003 (Business Times) - MALAYSIA'S plan to set up its very own palmoil market intelligence unit, aimed at reducing dependency on informationgenerated from elsewhere, is now at a very advanced stage.

Such information is currently sourced from Oil World, a publication basedin Hamburg, Germany, as well as the Chicago Board of Trade, the world'sleading commodity market. But it has not always been timely orcomprehensive enough to meet the Malaysian palm oil sector's needs.

Malaysian Palm Oil Association (MPOA) chairman Tan Sri Abdul KhalidIbrahim said presentations have already been made to the National EconomicAction Council, and subsequently the unit will be under the aegis of theMalaysian Institute of Economic Research (Mier).

"I have deliberately suggested it to be under Mier given its excellenttrack record. Furthermore, we do not want to set up yet another agency.

"My calling for the setting up of the unit is to take lessons from ouronce-mighty natural rubber industry," said Abdul Khalid, who is alsoKumpulan Guthrie Bhd group chief executive.

He was speaking at MPOA's fourth annual general meeting in Kuala Lumpuryesterday. His speech was made available to Business Times via e-mail.

To be called the Business and Economic Intelligence Centre for the PalmOil Industry (BEIC), the centre will manage four core aspects - industrystatistics, national and international statistics, market intelligence andgeographical and geo-political issues.

The unit's operations will be funded through a RM5 million annual cessprogramme participated by MPOA members. The association groups 96plantation companies with a combined landbank of 1.6 million ha. The BEICwill be responsible for providing intelligence through a comprehensive setof databases related to the palm oil industry and research that providesanalyses of emerging trends.

Abdul Khalid said the underlying purpose of the centre is to assistplanning, decision-making and better position the palm oil industry in anincreasingly challenging and complex environment. He said in August lastyear that the centre would build up its own crop production and pricedatabase with a view to offering MPOA members analyses and updates on thedemand and supply situation of the commodity.

"The setting up of the centre has been long overdue. It is time we takecharge of our very own commodity rather than rely on forecasts and otherinformation generated thousands of miles away," an analyst said.

She added that the centre will reduce the chances of the sector beingcaught by market volatility, and, with strong market intelligence,companies will be better at anticipating demand and supply and adjustingoperations accordingly to compete against the world's 16 other edibleoils. On another note, Abdul Khalid said the sector needs to continuouslyre-evaluate the industry, strengthen its knowledge base beyond thecommodity it produces, as well as understand the operations beyond thestandard mechanics of production.

Malaysia is the world's largest producer of palm oil. Of the 11.8 milliontonnes produced last year, 10.8 million tonnes were exported to 140countries to earn RM19.6 billion in foreign exchange.