Palm oil exports tipped to touch record RM80b

According to the Malaysian Palm Oil Board, Malaysia has achieved RM52.46 billion in palm oil exports in the first eight months of this year.

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Kuala Lumpur: Malaysia's palm oil exports forecast for this year is raised again to RM80 billion, which will be a new record, thanks to higher average palm oil prices and improved global demand. The current record was in 2008 when palm oil shipment topped RM65 billion as the crude palm oil (CPO) price averaged RM2,800 per tonne then. "Global demand for palm oil continues to be strong. India and China have been buying more palm oil. Africa has also placed more orders for Malaysian palm oil," said Malaysian Palm Oil Council chairman Datuk Lee Yeow Chor. Stronger commodity exports have helped the country offset weaker shipments of electronics, traditionally the major contributor to overall exports. According to the Malaysian Palm Oil Board (MPOB), the country has achieved RM52.46 billion in palm oil exports in the first eight months of this year. Two months ago, Plantation Industry and Commodities Minister Tan Sri Bernard Dompok forecast that this year's palm oil exports could top RM70 billion. In the first eight months of this year, palm oil futures prices were averaging at RM3,200 per tonne, higher than last year's RM2,700 per tonne. "We should do better than last year's RM60 billion as crude palm oil prices are still relatively high," Lee told reporters after speaking at Forbes Global CEO Conference on Tuesday. "Although we've milled 12.01 million tonnes of crude palm oil in the first eight months, 8 per cent more than the same period last year, prices are averaging at around RM3,200 per tonne. "Also, since palm oil is trading at a significant discount of more than US$200 per tonne (RM616) to soya oil, demand for palm oil should pick up in the months to come," he said. Asked if a new target of RM80 billion is achievable, Lee replied, "based on all the factors outlined, I would say yes". He reiterated MPOB's 18.3 million tonnes CPO output forecast for this year. This is good news for palm oil consuming countries worldwide because Malaysia, which supplies almost half of the palm oil, has experienced falling output in the last two years. In presenting his view on "fuel and sustenance for a green economy" at the conference, Lee explained how Malaysia has more than 400 mills that can convert waste to steam and electricity. The government, in reducing fossil fuel dependence, has called for more production of renewable energy and provided incentives in the form of feed-in tariffs that will kick off in December 2011. "Palm oil mills that are fuelled by biomass and biogas are already co-generating steam and power. Some of us are even supplying this green energy to the national grid to leverage on the feed-in tariffs," he said. When asked on green products the palm oil sector makes, Lee highlighted that the oleochemical industry produces biodegradable detergent and plastics. "The key ingredients that our oleochemical industry supply to detergent and surfactants manufacturers are biodegradable. It does not harm living organisms in our rivers and lakes," he said. Lee then cited Oil World's data, showing how the oil palm tree is the world's most efficient oil crop because one can harvest five tonnes of oil per hectare. This is 10 times more productive than soya oil planted in the US and five times more than rapeseed oil, Europe's main oil crop.