KUALA LUMPUR, July 23 (Bernama) -- Contrary to widespread expectationsthat commodity exports will be affected by a stronger ringgit followingthe decision to move it to a managed float vis-a-vis the U.S. dollar, anindustry official said "it will have a minimal impact on the edible oilsindustry."

The President of the Malaysian Edible Oil Manufacturers' Association,Sharuddin Tegoh said although "there will be some influence as palm oil isa commodity which we export out, the market is expected to adjust itselfdepending on the ringgit's movement,"

However, with the appreciation of the ringgit, Malaysian palm oil wouldface stiffer competition from other global edible oils," he told reportersafter the association's 45th annual general meeting here.

"It is imperative for the local industry players to continuously improvethe operational efficiency and productivity as well as product quality toenhance better yields and returns from their activity.

Sharuddin said the association supported the decision by the government asthis policy was expected to stimulate and generate better economic growth.

He said the association, through its Palm Kernel Committee was in activedialogue with the Malaysian Palm Oil Board (MPOB) to review and improvethe existing product specifications for better standards.

He said this in response to the move to the lay off of the fixed exchangerate system of 3.80 to the U.S. dollar on Thursday evening announced byBank Negara Malaysia and operate under a managed float, with its valuebeing determined by economic fundamentals.

The bank would monitor the exchange rate against a basket of currencies ofMalaysia's major trading partners to ensure the exchange rate remainsclose to its fair value.

On the market and price outlook, Sharuddin said the crude palm oil (CPO)price has been good for the first six months of this year at an averageprice of RM1,400 level per tonne against reports of drier-than-expectedweather in major producing countries.

Despite the high production, he said the price was expected to remainsteady for the rest of the year due to continuing strong consumption fromChina and rising bio-diesel demands from the European Union.

On the domestic front, Sharuddin said the retail price of cooking oil hasbeen fixed since 1998 under the Price Stabilisation Scheme.

Apart from the CPO, he said there had been numerous product cost increasesthat adversely impacted cooking oil members and suppliers in the industry.

He said the association appealed to the Ministry of Domestic Trade andConsumers Affairs to consider these product cost increases in the nextCeiling Price review.

Sharuddin explained that there was no intention of increasing the price,but what the association wanted was to ensure the relevant ministry toconsider these factors in the future.

-- BERNAMA