MALAYSIA’S crude palm oil (CPO) prices are expected to stabilise
between RM2,300 and RM2,700 a tonne next year, supported by steady
global demand, lower supply and new advances in oleochemicals research.
On Bursa Malaysia Derivatives Exchange, CPO prices currently hover between RM2,400 and RM2,500 a tonne.
Malaysian Palm Oil Board (MPOB) chairman Datuk Sabri Ahmad said 2010
will be a good year for CPO prices as output is not expected to be as
good as this year due to tree stress, pricey fertiliser as well as
robust demand from the US.
“Sabah
and Sarawak is expected to endure heavy rain early next year which will
cause delays in replanting efforts and fruit production is also
expected to drop 20 per cent due to tree stress and this will be a boon
to CPO prices,” said Sabri.
Palm oil production is expected to touch between 17 and 17.5 million
tonnes this year compared with 17 million tonnes last year.
Sabri said due to pricey fertilisers, palm trees will not get enough
nutrients and this will cause production to drop. He thinks that CPO
prices may hold between RM2,300 and RM2,700 throughout 2010.
“Petrol prices are also expected to rise next year which may augur well for the more competitive oil palm-based biodiesel.”
Meanwhile, Federal Land Development Authority chairman Tan Sri Dr Mohd
Yusof Noor said CPO prices are expected to hover between RM2,300 and
RM2,600 a tonne next year due to steady global demand and rising
awareness of the commodity. “Based on market feedback and our research
data on the ground, CPO prices may average at around RM2,300 a tonne
throughout the year.
“But it won’t reach the RM4,300-a-tonne historical high registered in March 2008,” said Mohd Yusof.
MPOB’s Sabri said demand from the US market would also rise due to
growing concerns of harmful transfats in food ingredients that have
prompted food makers to find other fats alternative.
Malaysian
Palm Oil Council CEO Tan Sri Dr Yusof Basiron, meanwhile, urged
smallholders to accelerate replanting efforts and re-engineer the
biodiesel business and its implementation.
“Low biodiesel
demand, high CPO price are slowing biodiesel production and a lot of
factories are not producing biodiesel. They can also add value to oil
palm by extracting tocotrienols and carotenoid and re-engineer them
further downstream,” he said.
Source : Business Times
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