Willie optimistic about CPO, FFB prices

KUCHING: Deputy Minister of Plantation Industries and Commodities Datuk Willie Mongin is optimistic about the prices of crude palm oil (CPO) and fresh fruit bunches (FFB).

He said while the price of FFB had dropped slightly, he believed it would not go down to below RM300 a tonne.

He said two or three years ago, the price of FFB was only RM200 per tonne but now, the price of FFB at the mill is about RM700 per tonne.

“This shows it still has potential. Actually, the drop in price was partly caused by ‘dumping’ by Indonesia.

“Right now, we still think this situation will not last long — we expect it to improve in another six months to one year’s time,” he told reporters after launching a sewing and webbing course at Puncak Borneo here yesterday.

The Puncak Borneo MP said aside from that, there is some improvement in the prices of other commodities such as pepper and cocoa.

According to a Reuters report, Malaysian CPO prices have seen their biggest onemonth decline in over 13 years in June, tumbling 22 per cent from a high of RM6,632 (US$1,506.25) a tonne to RM4,922 on June 27, a drop which erased most of this year’s gains.

The report said Malaysian millers purchase palm fruit bunches based on the monthly average CPO price, which was about RM6,200 but sell the extracted oil based on the daily market price.

Malaysia’s benchmark CPO futures had rallied to records this year due to a global edible oil supply squeeze caused by labour shortage, the RussiaUkraine conflict and an export ban by top palm oil producer Indonesia.

The contract fell when Indonesia ended that ban and sought to boost exports, which ignited more market volatility.

This shows it still has potential. Actually, the drop in price was partly caused by ‘dumping’ by Indonesia. Right now, we still think this situation will not last long — we expect it to improve in another six months to one year’s time.

— Datuk Willie Mongin, Deputy Minister of Plantation Industries and Commodities