August Palm Oil Stock Likely to be Flat at 1.3 Million Tonnes

SERDANG, Aug 14 (Bernama) — Malaysia’s palm oil stocks are likely to be flat at 1.3 million tonnes this month, the same level as in July, due to increase in demand and lower production caused by El Nino weather phenomenon.

“It will depend on supply. The stocks this month will be at about 1.3 million tonnes,” said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.

Dompok said demand for palm oil was still good despite the global economic crisis.

“We realise that most of the world faced economic turbulence over the last year, but we did not notice any peculiar change in demand for palm oil. Major importer like China continues to buy,” he told a media briefing after officiating the opening of the 2009 International Conference on Oil Palm and the Environment here Friday.

Dompok said one of the forces that drove prices was the avalability of stocks, adding that lower stocks and a change in demand would boost the price.

He said palm oil industry has become the largest of the 17 global oil and fats sectors, adding that 48.1 million tonnes of palm oil and palm kernel oil were produced globally in 2008.

“The output represents 30 percent of the world’s output of oils and fats, and it was slightly higher than its competitor, soyabean oil, with a production of 37.2 million tonnes,” he said.

Dompok said oil palm’s yield was one of the highest, averaging 3.66 tonnes per hectare, which was about 10 times that of soyabean oil.

In Malaysia, Dompok said, the palm oil industry has significantly contributed to the rapid economic development of the country.

“In 2008, Malaysia produced 17.7 million tonnes of crude palm oil and exported RM65.2 billion worth of palm oil products,” he said.

There were now 4.5 million hectares under oil palm, 410 palm oil mills, 52 palm oil refineries, 18 olechemical plants and 19 biodiesel plants.

“Apart from global financial and economic turbulence which has affected the commodities trade, the palm oil industry is now facing a greater challenge to its continued development from environmental and sustainability aspects,” he said.

On whether the campaign against the industry would cause a reduction in export, Dompok said it would not as supply would still go on.

He said research and development was important in the quest towards enhancing environmental and sustainable practices in the industry.

“There must be more research in measurement of carbon emissions and sequestration in various environments, including peat land, effects of indirect land use changes on green house gas emissions and environmentally-friendly processing technologies to reduce carbon footprint,” he said. Source : Bernama

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