Government to tackle further drop in palm oil prices

KUALA LUMPUR: The fall in the Malaysian crude palm oil futures prices – its biggest in more than 21 months – is alarming, but the government will undertake all efforts to handle the issue, says Deputy Primary Industries Minister Datuk Seri Shamsul Iskandar Mohd Akin.

At yesterday's close, the benchmark CPO contract for February delivery on the Bursa Malaysia Derivatives Exchange was down 3.9% at RM1,965 a tonne, its biggest one-day fall since Feb 16 last year.

Describing the low price situation as normal due to a plantation cycle, he said the global output of edible oils in the last two years was on the rise following good weather, hence resulting in increased stocks.

“The price declined to as low as RM1,500 per tonne in November 2008 and it also dropped in 2009.

“But when this happens, we have to be in continuous engagement with stakeholders to ensure that even when the price is low, we will still strive to ensure the market responds positively,” he said.

He was speaking to reporters on the sidelines of the National Seminar on Palm Oil Milling, Refining, Environment and Quality here yesterday.

Shamsul Iskandar said the government has taken several steps to tackle the issue, including through its involvement in the Council of Palm Oil Producing Countries (CPOPC).

“We are the chairman of the council for this year, therefore we will use this platform to face the price challenge,” he said.

Shamsul Iskander added that Malaysia would be partnering with the world's largest palm oil producer, Indonesia, to overcome the problem.

The palm oil production of both countries account for 83%of world's palm oil.

The deputy minister hoped with the implementation of the B10 biodiesel programme next year, the CPO price would be quite positive in the first quarter of 2019.

It was reported that Malaysia's CPO took a hit after Indonesia announced measures to increase shipments and that it would be reducing its export levy to zero from US$50 a tonne previously.

Exports of Malaysian palm oil products for Nov 1-Nov 25 fell 2.6% to 1,041,433 tonnes from 1,068,662 tonnes in the same period a month ago, according to cargo surveyor, Intertek Testing Services. — Bernama