‘11PC SPIKE IN GLOBAL CPO OUT­PUT’

Near-per­fect weather will help boost yield to 65m tonnes this year, say ex­perts

New Straits Times - - Business - ZARINA ZAKARIAH zari­naz@me­di­aprima.com.my

GLOBAL palm oil pro­duc­tion is ex­pected to climb 11 per cent to 65 mil­lion tonnes this year as the near-per­fect weather boosts yields.

This was among the key take­aways for the 2,000 ed­i­ble oil play­ers from 59 coun­tries who are par­tic­i­pat­ing in the two-day global an­nual Palm and Lau­ric Oils Price Outlook Con­fer­ence & Ex­hi­bi­tion (POC2017), which will also set the sec­tor’s di­rec­tion this year.

IJM Plan­ta­tions Bhd se­nior in­de­pen­dent di­rec­tor M.R. Chan­dran said In­done­sia might pro­duce 34.8 mil­lion tonnes of the com­mod­ity this year, up from 31.8 mil­lion tonnes last year.

Malaysia, the world’s sec­ond largest pro­ducer, would likely pro­duce 20 mil­lion tonnes this year, up from 17.3 mil­lion tonnes last year.

“There have been am­ple rain to boost pro­duc­tiv­ity in Malaysia and In­done­sia,” Chan­dran was quoted by Bernama as say­ing.

How­ever, in­dus­try ob­servers said ris­ing pro­duc­tion and slow­ing de­mand from top im­porters were ex­pected to keep a lid on crude palm oil (CPO) prices.

The CPO was ex­pected to trade be­tween RM2,500 and RM3,000 per tonne this year, said Chan­dran, adding that the com­mod­ity was also track­ing the ring­git’s move­ment against the US dol­lar.

Plan­ta­tion In­dus­tries and Com­modi­ties Minister Datuk Seri Mah Siew Keong said ex­pected av­er­age prices to hover be­tween RM2,700 and RM2,800 per tonne this year, with lo­cal ex­ports hit­ting RM70 bil­lion.

“This is based on an­tic­i­pa­tion of higher prices, driven by var­i­ous gov­ern­ment ef­forts and ini­tia­tives, in­clud­ing ven­tur­ing into other mar­kets, es­pe­cially In­dia and Iran,” said Mah af­ter of­fi­ci­at­ing at the con­fer­ence, which is or­gan­ised by Bursa Malaysia.

Bursa chief ex­ec­u­tive of­fi­cer Datuk Seri Ta­jud­din Atan said the lo­cal bourse’s crude palm oil fu­tures (FCPO) con­tract has be­come a glob­ally hedg­ing tool, ac­ces­si­ble and trade­able on CME Globex, an elec­tronic trad­ing sys­tem that pro­vides the broad­est ar­ray of fu­tures and as­set classes.

Traded con­tracts for Bursa’s FCPO rose five­folds to 11.4 mil­lion last year, from 2.2 mil­lion in 2006.

In ad­di­tion, FCPO con­tracts traded an­nu­ally sur­passed 2015’s record level of 10.9 mil­lion con­tracts, a rise of 4.58 per cent.

Ta­jud­din said Bursa would con­tinue to de­velop a sus­tain­able mar­ket­place by im­prov­ing its eco-sys­tem and en­hanc­ing con­tracts fea­tures to sup­port the dy­namic needs of the in­dus­try.

“The con­tin­u­ous ef­fort will en­sure we have a ro­bust cap­i­tal mar­ket to sup­port growth of the palm oil in­dus­try and the na­tion’s eco­nomic as­pi­ra­tions,” he added.

Ta­jud­din said Malaysia’s in­her­ent “seed-to-port” in­fra­struc­ture en­abled Bursa’s FCPO con­tract to be po­si­tioned as the global price bench­mark for crude palm oil mar­ket.

“We will con­tinue to work closely with the Plan­ta­tion In­dus­tries and Com­modi­ties Min­istry and the Malaysian Palm Oil Board to pro­mote more list­ings of plan­ta­tion-based com­pa­nies on Bursa.

“With pos­i­tive ex­pec­ta­tions for the Malaysia palm oil sec­tor this year, the ex­change will con­tinue to de­velop a sus­tain­able mar­ket­place to sup­port the dy­namic needs of the in­dus­try,” he added.

BERNAMA PIC

(From left) Felda Global Ven­tures Hold­ings Bhd chair­man Tan Sri Isa Sa­mad, Plan­ta­tion In­dus­tries and Com­modi­ties Minister Datuk Seri Mah Siew Keong, Sime Darby pres­i­dent and group chief ex­ec­u­tive Tan Sri Mohd Bakke Salleh and Bursa Malaysia chief ex­ec­u­tive of­fi­cer Datuk Seri Ta­jud­din Atan at the global an­nual Palm and Lau­ric Oils Price Outlook Con­fer­ence & Ex­hi­bi­tion in Kuala Lumpur yes­ter­day.

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