Higher palm oil export revenue seen

18.01.2017

The Plantation Industries and Commodities (MPIC) Ministry is optimistic of achieving higher palm oil export revenue in 2017 on the back of better prices seen in the commodity now.

Exports of palm oil products declined by 8.2% in 2016 to 23.29 million tonnes from 25.37 million tonnes a year ago, mainly due to lower production.

Minister Datuk Seri Mah Siew Keong said the ministry expects palm oil prices to maintain at high levels of RM2,700 to RM2,800 per tonne this year, as this will give an overall increase in export revenue.

The commodity’s price has averaged at RM3,200 per tonne now compared to around RM2,200 per tonne in January last year, according to ministry’s data.

“Due to the El Nino effects in 2016, palm oil production registered a 13% decline to 17.32 million tonnes compared with 19.96 million tonnes in 2015.

“This had somewhat resulted in tighter supply, but was mitigated by the average palm oil price of RM2,653 per tonne in that year (2016),” he said after launching the Palm Oil Economic Review and Outlook Seminar 2017 organised by the Malaysian Palm Oil Board (MPOB) yesterday.

But the better palm oil prices had resulted in an increase in export value of palm oil products in 2016 to RM64.58bil from RM63.2bil in 2015, Mah pointed out, adding that palm oil stocks also declined last year by 23.2% to 1.77 million tonnes, the lowest stocks recorded since 2011.

In line with the ministry’s efforts to spur the growth of the palm oil industry here, he said MPOB has set up an Oil Palm Mechanisation Fund with an initial investment of RM30mil to facilitate further research and technology for the palm oil industry.

“The palm oil sector is an important sector in the country and more than 40% of palm oil plantations were managed by more than 550,000 small stakeholders.

“And we hope the private sector will contribute RM5mil towards the fund for a start as this would help spur research and technology activities for the stakeholders,” noted Mah.

The funds will be used to reduce foreign labour by carrying out more research initiatives and acquiring the best technology suited for the palm oil industry here.

The labour intensive industry to date has about 431,357 workers in estates, of which 77% or 332,135 were foreigners.

With more efficient technology and equipment, this could reduce foreign labour, as we are targeting one worker per 12 ha as opposed to one worker per eight hectare now, he pointed out.

On recent reports claiming that Nutella could contain cancer causing agents, Mah brushed off saying that the claims were not true and it wasn’t proven.

“The ministry has always strived for palm oil sustainability.

“We are working on a scheme for stakeholders so that they too can acquire the Malaysian Sustainable Palm Oil certification scheme,” said Mah, adding that this would reduce further allegations from external parties that palm oil was the cause of orang utans deaths.

In terms of export markets, India still remains the largest import market, accounting for 2.83 million tonnes or 17.6% of total Malaysia palm oil exports in 2016, followed by European Union at 2.06 million tonnes and China at 1.88 million tonnes.


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