October 17 2007 (Business Times) - Malaysia has revised upwards its 2007 forecast of the value of palm oil exports, in view of rising palm oil prices.

Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said revenue from exports of palm oil is likely to hit RM40 billion compared with the original forecast of RM35 billion.

"We had initially projected a conservative 10 per cent jump in export values for this year. But looking at the figures for the first nine months of this year, we are optimistic and have revised upwards our projections, predicting a 25 per cent growth from last year's RM31.81 billion," Chin told Business Times in a telephone interview yesterday.

From January to September 2007, palm oil export values reached RM30.44 billion.

"This year, palm oil prices have been phenomenal compared with last year. And lately prices are on the uptrend again as we are at the tail-end of the peak harvesting season," Chin said.

Last Friday, the third-month benchmark December contract on Bursa Malaysia Derivatives Exchange rose RM51 to close at RM2,731 per tonne. It was a near high from the highest of RM2,764 per tonne achieved on June 6.

"October's output should taper because plantation workers have taken leave to be home with their families for the Raya celebrations," Chin said.

On the international front, China National Grain and Oils Information Centre forecast soybean output to fall this year to its lowest since 1999 due to drought.

"Judging from the forecast lower output of soyabean in China, our biggest buyer is likely to buy more palm oil from us. The prospects of higher palm oil prices are quite eminent," Chin said.

Malaysian Palm Oil Board (MPOB) said China bought 2.9 million tonnes of palm oil, eight per cent more than in the same period last year, while Pakistan's purchase was up 11 per cent.

Top five buyers of Malaysian palm oil in the first nine months were China, the Netherlands, Pakistan, the US and Japan.

During the period, Malaysia only harvested 10.08 million tonnes of crude palm oil (CPO), 14.5 per cent less than in the same period in 2006.

All states, except for Sabah, Sarawak and Terengganu, saw shrinking CPO output.

Last year, Malaysia was still the world's largest producer and exporter of palm oil, churning out 15.9 million tonnes and reaping RM31.81 billion in export revenue.