CPO price can hit RM3,000 a tonne, says MPOB

Published on 20 Nov 2019. | Source: thestar.com.my

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KUALA LUMPUR (Bernama) -- Malaysia’s crude palm oil (CPO) price can possibly touch RM3,000 per tonne, if both Malaysia and Indonesia continue to pursue their palm biodiesel mandates, said Malaysian Palm Oil Board (MPOB) director-general Dr Ahmad Parveez Ghulam Kadir.

"With the right sentiment produced by the biodiesel mandates, along with more replanting programmes being carried out and initiatives to explore new markets to increase exports, it is possible to hit the RM3,000-per-tonne level,” he said without giving any timeframe.

According to Ahmad Parveez, current CPO prices, which hover between RM2,500 and RM2,600 per tonne, are deemed as a "very good” pricing.

"Of course, we would rather go for RM3,000 per tonne, but so far, the level is very reasonable; even the fresh fruit bunches are now at more than RM500 per tonne.

"The prices seem to be very good now. We hope this price momentum can continue,” he told Bernama on the sidelines of the three-day Malaysian Palm Oil Board International Palm Oil Congress and Exhibition 2019 here today.

Touching on the government’s replanting efforts, Ahmad Parveez said the RM550mil palm oil replanting loan fund for smallholders, announced under the 2020 Budget, would help to increase palm oil yields moving forward.

"So far, about 200 eligible smallholders have approached us for replanting loans. We can see the momentum is there, and we expect to receive more applications in the future,” he said.

Under the 2020 Budget announced in October, a RM550mil oil palm replanting loan fund will be allocated for smallholders collateral-free at an interest rate of two per cent per annum, with a tenure of 12 years, including a four-year moratorium on repayment.

During his budget speech, Finance Minister Lim Guan Eng said the replanting would be undertaken using the latest seedlings and also in compliance with Malaysian Sustainable Palm Oil (MSPO) standards to ensure better productivity and marketability.

Ahmad Parveez said that with the government's efforts to push for MSPO certification, more countries like China, Japan and South Korea have started to recognise the MSPO certificates.

"That could be a good selling point and keep the CPO prices up,” he said.

In addition, he said, Malaysia would continue to seek more new markets, particularly Central Asian and African countries, to boost exports of the commodity.

"Overall, given the current price range, Malaysia’s palm oil industry is doing very well. We really hope that with all the efforts done by the government and industry players, we will be able to keep this momentum going and to manage our stockpile level,” he said.

The latest data released by MPOB on Nov 11 showed that Malaysia’s total palm oil stocks eased 4.1% to 2.348 million tonnes in October 2019 from 2.448 million tonnes recorded in the previous month.

Meanwhile, CPO stocks declined by 2.19% to 1.323 million tonnes in October from 1.353 million tonnes in September, and processed palm oil stock contracted 6.47% to 1.024 million tonnes from 1.095 million tonnes previously.

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