20/2/06 (The Star)  -  HOT issues on biofuels and the price outlook for crude palm oil (CPO) this year will hog the limelight at the two-day Palm and Lauric Oils Conference 2006 (POC 2006) organised by Bursa Malaysia beginning this Thursday. 

The annual conference, which has a huge following from the oil and fats fraternity both locally and abroad, is expected to attract over 1,300 participants this year.

Golden Hope Plantations Bhd group chief executive Datuk Sabri Ahmad told StarBiz that POC 2006 would be an exciting event for industry players particularly those involved in biofuel projects.

He said: “Players want prominent speakers to shed some light on new issues pertaining to biofuels as well as the prospect of palm based biodiesel exports particularly to Europe.”

At POC 2006, 11 speakers will talk on the latest development in the commodity sector ranging from the CPO and lauric oil price outlook, short-term and long-term impact of biofuels, palm based bioenergy in Europe and sustainable palm oil production. 

The speakers include commodity expert LMC managing director Dr James Fry, Biox group managing director Arno Hendriks, OilWorld director Thomas Mielke, Godraj International Ltd director Dorab Mistry, Malaysian Palm Oil Board director general Tan Sri Yusof Basiron, United Plantations Bhd executive director (corporate affairs) Carls Bek-Nielsen and Indonesian Palm Oil Association chairman Derom Bangun.

According to Sabri, aggressive ventures into biodiesel plants and the increasing global demand for biofuels in global markets will have an impact on vegetable oil prices including palm oil in the international market.

“The current hype on biofuel will support CPO prices and increasing demand for biofuels overseas could lead to CPO being traded at higher levels possibly touching RM1,600 per tonne this year,” he added.

The average price of CPO last year was RM1,400 per tonne compared with RM1,610 per tonne in 2004. 

Malaysian Palm Oil Association (MPOA) chief executive Azizi Meor Ngah said 10 biodiesel plants were expected to be operational in Malaysia this year with a total production capacity of almost 800,000 tonnes. “It will be interesting to know the potential export markets for our palm based biodiesel, the implications and new challenges ahead for exporting countries,” he added. 

He said another issue would be on Government interference and the change of policy in Europe with regard to tax rebate, if biofuel players in Europe decided to switch to CPO as the source material for biofuel.

Other factors include the appreciation of the ringgit against the US dollar at RM3.60 to US$1 by year-end as forecasted by trade analysts as well as the prospect of biodiesel becoming uneconomical due to declining petroleum prices. 

Azizi said Malaysia's palm oil export this month was expected to exceed one million tonnes. 

The CPO production this year is expected to fall below the 14.96 million tonnes achieved last year while palm oil stocks are likely to remain below 1.5 million tonnes this year.

He said: “MPOA expects CPO prices to trade within the RM1,450 and RM1,500 per tonne level until middle of next month and breach the RM1,500 per tonne level going forward.”

“We were told that so far one or two plantation companies have sold forward their CPO at RM1,700 per tonne for delivery next year,” he added. He expects a bullish outlook within the industry with average CPO price this year at RM1,600-RM1,650 per tonne based on current exchange rate.