15/11/2010 (Bernama), Cairo - Despite high crude palm oil (CPO) price, the commodity is still competitive vis-a-vis major competing vegetable oils in the world like soyaoil, sunflower and rapeseed, says a senior official of Malaysian Palm oil Council (MPOC).

MPOC deputy chief executive officer Dr m. Kalyana Sundram said it was not just palm oil price that has increased but prices of all other vegetable oils and fats have also spiralled in tadem.

"Though palm oil and soyabean prices have increased, the price difference between the two edible oils has been maintain," he told BERNAMA at the just-concluded Malaysia-Egypt Palm Oil Trade Fair and Seminar 2010 (POTS Egypt 2010).

Dr Kalyana Sundram said though the palm oil price of all other vegetable oils and fats have also spiralled in tadem.

Despite the higher price, Dr Kalyana Sundram said the dedicated palm oil users would continue to use the commodity.

"After being engaged in palm oil trading or having used palm oil for more than 30 years, the end-users understand the oxilation that happens in the marketplace.

"They know the price fluctuations that occur over a cyclicle period are to be anticipated and despite that they will continue to use palm oil.

"Despite all said and done, you will see palm oil is still being featured as the cheaper oil among other major competing oils," he said.

Research houses, OSK Research and ECM Libra, have been reported as saying that "demand destruction" would start if CPO prices soar excessively high.

Currently, CPO price is hovering at RM3,000 a tonne.

OSK said the price upside is expected to be between RM3,300 and RM3,500 a tonne while ECM Libra said if the CPO price touched RM4,000 a tonne, a "pullback" in demand could happen.

This scenario was seen in 2008 when high CPO price proved counter-productive to demand and as a result, stock levels ballooned to an all-time high of almost 2.3 million tonnes, triggering a price decline.

On the POTS Egypt 2010 from nov 7 to 9, Dr Kalyana Sundram said the event was a continous effort by mpoc in collabration wiyh the Malaysian Palm Oil Board (MPOB) to enrich the knowledge on palm oil among end-users.

The POT Egypt 2010 opened by MPOC chairman Datuk Lee Yeow Chor was the 17th series of Palm Oil Trade Fair and seminar organised at international level.

"The event is gaining increasing recognition with overwhelming response from participants. In the past, there were only 200 participants, but at the POTS Egypt 2010, we had 270 attendees, So, there is keen interest in event," said Dr Kalyana Sundram.

He said the programmes were structured in such a way that they comprised subject matters most relevant to the market that MPOC was targeting at.

"In Egypt, we need to tell them about the situation in the palm oil industry, the production cycles in Malaysia, our palm oil exports and the issues we faced with the anti-palm oil campaigners.

"There were also working papers presented specifically for the Egyptian palm oil market. International palm oil experts like Dr James Fry, the managing director of LMC International Ltd, were inviter to speak on issues confronting the palm oil industry like pricing and related matters.

"This is because we want to give a rounded message to our end-users with the hope that they will continue to look up to palm oil as the most sustainable and affordable source of edible oil and the raw material for many of the food formulations.

"As Egypt is an important staging point for the re-export of palm oil to the Middle East region will think on a wider perspective to export palm oil to Middle East countries, he said.

Dr. Kalyana Sundram said this has been facilitated by some of the trade agreements which Egypt has signed with the countries in the region.

He said palm oildirect exports from Malaysia would probably incur higher tax than re-exporting from Egypt after being processed and packaged.

"With the processing cost, it is still more economical to use Egypt as the transit point to export palm oil to the Arab world," added Dr Kalyana Sundram, who is also MPOC's director of science and environment.