Commodities: Time to shine?

THE commodity sector remains one of the most important sectors for Malaysia’s economy.

As prices of several commodities such as crude oil and crude palm oil (CPO) were on the uptrend in the past 12 months, the scenario has put fresh hopes that the country’s economy will be on better footing this year.

Malaysia, being a heavy exporting country, has been relying on the exports of commodities such as oil palm and crude oil to boost the country’s economic growth.

Thus, in an effort to boost demand and ensure the quality of production, the government is providing a grant of RM50 million to assist the commodity industry in addressing food safety concerns, including reducing the level of containment in palm oil.

Minister of Plantation Industries and Commodities Datuk Seri Mah Siew Keong disclosed that the grant is open to all factories and refineries working together to do research and further increase the quality of palm oil.

Additionally, to further promote the image of the oil palm industry, Mah said Malaysia would embark on the mandatory certification of certified and sustainable palm oil under the framework of Malaysian Sustainable Palm Oil.

The scheme – which was implemented on a voluntary basis beginning 2015 – will be made mandatory in stages starting from December 31, 2018.

On the outlook for palm oil, Mah expects exports to reach RM70 billion this year from RM67 billion in 2016 and CPO price to average between RM2,700 and RM2,800 per tonne this year.

“We are maintaining our earlier forecast that the CPO will average between RM2,700 per tonne and RM2,800 per tonne in 2017.

“This is on anticipation of higher prices, driven by various government efforts and initiatives, including venturing into various other markets, especially India and Iran,” Mah reportedly said.

“We are maintaining our earlier forecast that the CPO will average between RM2,700 per tonne and RM2,800 per tonne in 2017.” Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities