MPIC minister expects CPO prices to hover at RM2,700
We going to work harder to diversify the markets. By next month, we will go to India and hope to sign the free trade agreement with Iran to boost palm oil exports. Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities
KUALA LUMPUR: The Ministry of Plantation Industries and Commodities expects crude palm oil (CPO) prices to average between RM2,700 and RM2,800 per tonne this year.
In 2016, the average price was RM2,600 per tonne.
Its Minister, Datuk Seri Mah Siew Keong, said the expected higher prices was driven by efforts and initiatives of the government, including venturing into various markets, especially India and Iran.
“We going to work harder to diversify the markets.
“By next month, we will go to India and hope to sign the free trade agreement with Iran to boost palm oil exports,” he told reporters at the ‘Reach and Remind Friends of the Industry Seminar 2017 and Dialogue' yesterday.
He said the other potential markets the government would look into included West Asia, South America and non-European Union countries.
“On CPO production, we expect it will be higher this year compare to 2016 due to the allocation of RM30 million grants for smallholders to undertake replanting as well as planting of new oil palm under Budget 2017,” he said.
“The smallholders are eligible to apply for the replanting grant of RM7,500 per hectare,” he said.
Mah said with the replanting initiatives, the ministry targeted to achieve an oil extraction rate from the current 20 per cent to 23 per cent by 2020.
CPO production between January and November last year fell to 15.8 million tonnes due to the El Nino dry weather phenomenon, he said.
“However, eventhough the price has shot up the productivity of palm oil has stagnated.
“Since palm oil is the largest contributor to the agriculture gross domestic product, there must be more innovations,” he said.
Earlier, Mah said, Malaysia was preparing the strategic palm oil industry for the tough challenges ahead.
As the sector marked its 100 years of commercial cultivation this year, he said, the industry must be sustainable given its importance to the country's economy in terms of exports and employment.
“We will be pushing hard to resolve the country's decadeold issue of stagnating palm fruit yields and to resort to mechanisation in plantations within the next 10 years to mitigate labour shortage,” he said. — Bernama