KUALA LUMPUR: Crude palm oil (CPO) is expected to trade between RM2,500 and RM3,200 per tonne this year, said Malaysia Palm Oil Council chief executive officer Tan Sri Dr Yusof Basiron.
Presenting a paper on Market Challenges and Opportunities for Palm Oil in 2013, Yusof noted that palm oil prices were affected by temporary oversupply in production and thus a supply rationalisation was needed.
“We would need to build more tanks and ships to cater for the peak production months as well as more multi-feedstock bio-diesel plants to remove excess supply from the market. I suggest that this issue be addressed both by Malaysia and Indonesia,” he said at the Palm and Lauric Oils Conference and Exhibition 2013 here yesterday.
“Planters have to control the production to ensure a higher value on the commodity,” he added.
Yusof estimated the CPO stockpiles could decline to at least 2 million tonnes by mid-2013 as CPO production was showing a decreasing trend. He said currently, the CPO production was almost 1.5 million tonnes per month.
The country recorded the highest CPO stockpiles in December last year at 2.63 million tonnes, which then dropped to 2.58 million tonnes in January.
He highlighted several challenges faced by the palm oil industry in the global market, including the ideology threat (which meant that developing countries had to play a role to preserve their forests), scarcity of land, growth in world population and global warming.
“The world population is expected to grow from 7 billion in 2011 to 9 billion by 2043; thus food production has to meet this increasing rate. This is sufficient to exert pressure on commodities' prices,” Yusof noted.
He added that with the increase in the population, demand for oils would rise as well. According to his research, to fulfill the demand, the world will need an additional 1.48 million ha per year if the yield factor for palm oil was 4 tonnes per ha.
Yusof also highlighted that the palm oil industry had vast opportunities for future exploitation to increase revenue and the challenges faced were manageable. - The Star Biz
Wednesday March 6, 2013
