20/09/2009 (Find Article.com) - MALAYSIA'S palm oil exports may expand by 20 per cent to touch RM60 billion this year, thanks to higher average palm oil prices and improving global demand.

Palm oil futures prices are now averaging at RM2,500 per tonne, higher than last year's RM2,250 per tonne. The latest data from the Malaysia Palm Oil Board (MPOB) shows that palm oil exporters have shipped out almost 11 million tonnes for consumption in the global food industry. This is 6 per cent growth from a year ago.

In an interview with Business Times, Malaysian Palm Oil Council (MPOC) chief executive officer Tan Sri Yusof Basiron said apart from Asia, Russia and the Middle East, more palm oil shipments are going to Western nations.

Here are some excerpts from the interview:

BT: Do you think Malaysia's global palm oil exports could surpass last year's RM49.59 billion? If so, by how much?

Yusof: This year, Malaysia's crude palm oil output is not likely to change much from last year. Dry weather caused by El Nino and tree stress in the early part of the year has slowed down crude palm oil output. In the first eight months of this year, output only grew by a mere 1.7 per cent to 11.1 million tonnes. This has limited palm oil available for exports.

The current limited supply trend is expected to continue for the rest of 2010 as the Indonesian government has imposed higher export duties on its palm oil shipments.

As more rapeseed, soya and corn oil are burnt as renewable energy in Europe, the US and Latin America, more palm oil is being imported to make margarine, mayonaise, cheese spread and chocolate.

Asia's strong economic growth, including our Asean neighbours, and recovering economies in the Middle East, will spur our palm oil exports by between 10 and 20 per cent. So, it (Malaysia's palm oil exports) should be within the range of RM55 billion to RM60 billion.