Eight Palm Oil EPPs Starts to Show Progress

PUTRAJAYA: Some of the eight palm oil entry point projects (EPPs) identified under the Palm Oil National Key Economic Area (NKEA) have started making progress despite their launch only three months ago, said Performance Management and Delivery Unit (Pemandu) director of palm oil, agriculture and rubber industry, John Low.

“We will soon have 36 palm oil mills with biogas facilities by year-end compared with 28 mills currently,” he said.

In total, Malaysia has over 400 palm oil mills but many millers are reluctant to undertake the clean development mechanism-related projects such as biogas due to the high capital cost incurred.

Low was speaking at the Reach and Teach Friends of the Industry: Challenges and Opportunities in 2011 seminar organised by the Malaysian Palm Oil Council (MPOC) yesterday.

The Malaysian Palm Oil Board (MPOB) will start to position agriculture officers nationwide including Sabah and Sarawak to monitor the grading and the quality of palm fruits particularly at the independent mills to ensure better quality and higher OER (oil extraction rate) levels.

The current national average OER is about 20.5%.

“We are also considering giving out incentives or bonus to independent millers who have successfully increased their OER,” Low added.

To compete effectively in 2011 and beyond, we need all the tools of the trade… MPOC CHAIRMAN DATUK LEE YEOW CHOR

On workers’ productivity, the MPOB is coming up with a new version of its existing mechanised palm oil harvester Cantas to speed up the harvesting of fresh fruit bunches in the plantations.

Earlier, MPOC chairman Datuk Lee Yeow Chor said: “For the palm oil industry to compete effectively in 2011 and beyond, we will need all the tools of the trade.

“This includes gathering crucial information on what our competitors are doing and the need to understand new issues on the horizon,” he said in his welcome address.

“We have been blessed with continued funding from the cess collected from the palm oil industry players and the additional promotion funds from the Government,” said Lee.

Lee said 2010 had been a reasonably good year for the palm oil industry.

“Prices have trended upwards by about 30% from the third quarter last year with predictions of continued high prices until the second quarter of 2011,” he added.

Meanwhile, a palm oil technical analyst said within the next two years, CPO futures prices could be traded between RM3,600 and RM3,800 per tonne.

“With production normally lower in February and exports set to remain robust, it will be natural for CPO prices to increase further,” saidNextVIEW Sdn Bhd chief stategist Benny Lee when presenting a paper on the “Palm Oil Market Outlook 2011.”

According to cargo surveyor Intertek Agri Services last Thursday, Malaysia’s palm oil exports during the Jan 1 to 20 period had risen by 9.7% to 852,607 tonnes from a month earlier. However, CPO prices in the mid-term (next five months) are expected to consolidate between RM3,300 and RM3,550 per tonne.

“Once the CPO price breaks below the short term support price level of RM3,600 per tonne, the mid-term consolidation (in prices) is expected to begin,” he added.

Another crucial factor affecting price of CPO is the performance of the US dollar and yuan.

Lee said: “The yuan has a positive correlation with the price of CPO. The widening spread on CPO and the yuan since last year has almost closed, after the price of CPO rallied in the past three months.”

However, should the US dollar continue to weaken, the rally in the CPO prices may be extended in the next two to five months, he said.

Source : The Star by Hanim Adnan

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