Brighter outlook for palm oil in 2017

10.01.2017

Oil palm planters can look forward to better pricing on the back of strong US dollar and the gradual pick up in global demand. Currently, palm oil is trading above RM3,000 per tonne. As palm oil output across Malaysia and Indonesia start to recover in the second half of the year, many among the palm oil community predict prices to settle.

“This year, I am hopeful palm oil prices would average at RM2,700 per tonne, higher than last year’s RM2,600 per tonne as demand starts to pick up,” said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong. “So far, on a monthly basis, we are seeing increasing exports to China, having dropped drastically over the last few years.

This year, we’ll have to work harder to market palm oil,” he said. Mah was speaking to reporters after officiating at the opening of “Reach and Remind Friends” seminar organised by the Malaysian Palm Oil Council here today. When met on the sidelines, Sime Darby Bhd president and group chief executive Tan Sri Mohd Bakke Salleh concurred with Mah. “It would be good for prices to go on trading above RM3,000 per tonne but as output recover in the second half of the year, we hope prices don’t settle too much. We’re okay with the RM2,700 level,” said Bakke.

Mah told reporters he will be visiting India next month to promote the consumption of Malaysian palm oil. “We will also go to Iran now that trading sanctions are lifted.” In raising oil palm productivity, Mah noted it is essential for smallholders to replant old trees. “We have a RM30 million budget for smallholders to replant. It works out to be RM7,500 per hectare. Please send in your applications.” “The palm oil industry is very important to Malaysia. It’s here to stay.

While there are challenges, there are also big potential to add value to this industry,” said the minister. “I’m hopeful the palm oil industry will continue to grow and lead the economy under Prime Minister Datuk Seri Najib Razak’s 30-year transformation plan to 2050,” said Mah. This year, Malaysia is celebrating 100 years of oil palm planting. In 1917, Henri Fauconnier, established Malaysia’s first commercial oil palm planting at Tennamaram Estate, Selangor, in a bid to replace an unsuccessful coffee estate.


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