THE proposed Business and Econo-mic Intelligence Centre (BEIC) for thepalm oil industry is already at an advanced stage of establishment,according to Malaysian Palm Oil Association (MPOA) chairman Tan Sri KhalidIbrahim.

He said the foundation for the setting up of this critical watch towercentre had been identified, with presentations made to the NationalEconomic Action Council (NEAC).

I have also suggested that the BEIC be put under the aegis of theMalaysian Institute of Economic Research given the latter's excellenttrack record (in research work), Khalid said at the MPOA's 4th AGM inKuala Lumpur yesterday.

Essentially, the proposed BEIC would manage four core issues pertaining tothe industry industry statistics, national and international statistics,market intelligence and geographical, including geo-political, issues.

Significantly, the proposed centre would be responsible for providingintelligence through the creation of a comprehensive database related tothe palm oil industry, and research that provides analysis of emergingtrends.

The underlying purpose is to assist planning and decision-making so as tobetter position the local palm oil industry in an increasingly challengingand complex environment, Khalid said.

Established in 1999, the MPOA was the result of the merger of three largeplantation organisations the Rubber Growers Association, the UnitedPlanting Association of Malaysia and the Malaysian Palm Oil GrowersCouncil.

The MPOA continuously needs to re-evaluate the industry inside out,strengthen its knowledge base beyond the commodity that we produce as wellas our understanding of the operations beyond the standard mechanics ofproduction, to comprehend the entire process cultivation, production,marketing and trading as well as the ultimate uses of the commodityproduced, Khalid said.

He also pointed out that to continue with its professional work, theassociation must re-look at its funding mechanism.

The two options as highlighted in the previous AGM were focusing onefforts towards a one-time government grant sufficient to generate anincome stream to meet operational expenses or increasing the membershipsubscription fee.

Khalid, who is also Kumpulan Guthrie Bhd's group chief executive, said:Being in commodities, we should never make the mistake of being lulledinto complacency.

He cited challenges like cost competitiveness, unfair trade practices,real global concerns such as loss of forest and food safety, self-styledchampions of soils and streams, and misperceptions about palm oil as anexcellent and nutritiously sound edible oil, never seem to go away.

The day is never done, with erosion of competitiveness from productivityimpasses and rising costs, Khalid added.

He said productivity exhortations lifted the national oil extraction rate(OER) to nearly 20% but further improvements could be increasingly moredifficult and call for the redoubling of efforts.

He added the future of the industry, at least for the short term, isgrowing based on the record crude palm oil (CPO) futures trading at theMalaysia Derivatives Exchange Bhd.

Last year, turnover of CPO futures stood at 909,073 lots, represented anunderlying notional amount of 22.73 million tonnes of CPO, an increase ofnearly 90% from a year ago.