09/08/05 (The Edge Daily) - All palm oil trade will soon be conducted inreal time online, a move which will save the oil palm plantation industryup to RM1.57 billion annually, said Oilpalmworld Sdn Bhd managing directorJohn Kuruvilla.

"Cost cutting has long been the focus of the plantations and at the momenttrade is done in the conventional manner, by telephone, faxes, and anormal tendering exercise will take three weeks. All these processes willcost you," he said.

"Electronically, you can do the same things in half a day and you can beanywhere in the world to do the transaction," he added.

Kuruvilla was speaking to reporters on Aug 9 in Kuala Lumpur at theofficial opening of Oilpalmworld’s e-Marketplace trading platform. Threeyears and RM6.2 million in the making, the members-only platform currentlyhas 526 members.

Kuruvilla said the platform could handle e-trading and e-procurementactivities as of now.

The portal's members include industry heavyweights Kuala Lumpur KepongBhd, the Federal Land Development Authority, Perlis Plantations Bhd andIOI Plantations Bhd.

"Most of the Malaysian Palm Oil Association members are already registeredwith us and evaluating. They have expressed interest in trading andprocurement," said Kuruvilla.

Asked about the chances of other players like the Guthrie Group and SimeDarby signing on the dotted line, Kuruvilla said the target was to hit1,000 members by year-end and he was confident the other players wouldsign on.

He said as part of the membership drive, potential members were given freeone-month trial membership. The usual price of membership was RM1,000 perannum, he said.

"We have a business plan put into place and operations should be growingfrom this month. We are already getting income now and we hope that peoplewill start trading more," he added.

Aside from charging membership fees for use of the portal, Kuruvilla alsosaid a commission fee of 50 US cents (RM1.88) per tonne was charged, whichhe said was 50% off the current brokerage fees of US$1 per tonne.

Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kuiwas very supportive of the portal and encouraged both the private andpublic sectors to adopt its widespread use.

"Out of the RM63 billion agricultural products exported last year, palmoil accounted for RM29 billion, about 49% of the country’s totalagricultural exports," he said.

"The ministry feels the initiative to launch this oil palm e-market placeis a good move that looks forward and keeps pace with the growth ofinformation communication technologies.

"E-trading is K-trading. It’s a natural process of changing from the oldways of trading to the new ways of trading and the ministry is hopefulthat such an initiative will be accepted by the industry and will be anaccepted norm very soon," he added.

Chin appealed to the palm oil sector to move at least 10% of all itsactivities into the electronic platform by the end of the year.

"Once this move is made, slowly but surely the electronic marketplace willgrow and become a reality," he added.