‘REVENUE TO RISE TO RM78B’
MPOB banking on lower stocks, higher prices and rising demand, despite India restrictions
INDUSTRY players can expect stronger palm oil prices and demand this year despite concerns over India’s move to restrict Malaysian imports.
“Starting with the low opening palm oil stocks, firmer price and stronger demand, this year is expected to be a better one for the palm oil industry,” said Malaysian Palm Oil Board (MPOB) director-general Dr Ahmad Parveez Ghulam Kadir at a palm oil economic review and outlook seminar, here, yesterday.
MPOB expects export revenue from palm oil products to increase by 21 per cent to RM78 billion this year from RM64.45 billion last year, in anticipation of firmer crude palm oil (CPO) prices.
“Last year, export of Malaysia’s palm oil products rose by 12 per cent to 27.86 million tonnes from 24.88 million tonnes the previous year. However, export revenue slipped 4.5 per cent to RM64.45 billion due to the lower palm oil price,” he said.
Last week, India placed curbs on imports of refined palm oil and had informally asked its traders to stop importing Malaysian palm oil.
Reuters reported on Wednesday, citing sources, that New Delhi could also restrict the import of petroleum, aluminium ingots, liquefied natural gas, computer parts and microprocessors from Malaysia. However, no action has been taken thus far.
Primary Industries Minister Teresa Kok said she expected more challenges in major markets due to India’s restrictions.
“The ministry will engage these markets, including through diplomatic channels, to seek amicable solutions to restore market confidence and strengthen existing and potential markets.”
Kok said she was in contact with the Indian High Commissioner to Malaysia, among others, over the issue.
“It is important for us to engage them (Indian government) further through diplomatic channels and the stakeholders.”
She said the new markets for Malaysia’s palm oil in the Central Asian region, such as Kazakhstan and Uzbekistan, had increased their import of the commodity.
“Apart from widening market access, Malaysia investors are also encouraged to explore the opportunity for investment in upstream and downstream sectors in the region.”
Meanwhile, Kok said a committee would be set up to monitor Malaysia’s CPO windfall tax trust fund this year.
She said the Finance Ministry had agreed that her ministry would oversee the management of the fund so that the tax revenue could be channelled back to the industry and that it was managed transparently.
“We got approval from the Finance Ministry to manage the collections from the windfall levy. We are going to give back to the industry and grow it. Industry players will be invited to be part of the committee.”
Kok said the trust fund, known as the Biodiesel Stabilisation and Palm Oil Development Fund, would be a different segment under the palm oil industry.
At least half of the fund would be used to stabilise biodiesel prices.
“The proposed trust account is estimated to have RM200 million collected from the windfall tax.”
Effective Jan 1, a three per cent windfall tax per tonne has been imposed on planters in the peninsula, while for those in Sabah and Sarawak, a 1.5 per cent windfall tax will be slapped if the CPO prices exceed RM3,000 per tonne.