Local palm oil players to keep an eye on new ministry’s policy move

KUALA LUMPUR (March 9): Local palm oil market players will keep an eye on the Plantation Industries and Commodities Ministry’s move on key policies that have been supporting the industry following the appointment of Datuk Dr Khairuddin Aman Razali as the minister today.

Singapore-based Palm Oil Analytics’ owner and co-founder Dr Sathia Varqa said the key policies were the plans to implement the B20 biodiesel programme and achieve 100% Malaysian Sustainable Palm Oil (MSPO) certification of the palm industry, as well as the ministry’s approach towards the European Union’s (EU) palm biodiesel ban under the Delegated Act II and 3MCPD (3-monochloropropanediol) issue.

The previous Pakatan Harapan-led government had aimed to achieve a full implementation of B20 biodiesel in the transportation sector by mid-2021 and targeted to secure 100% MSPO certification in oil palm planted areas nationwide.

According to former primary industries minister Teresa Kok Suh Sim, as at Feb 21, 2020, 4.42 million hectares, or 78.8%, of the 5.9 million hectares of oil palm plantations in Malaysia had attained the MSPO certification, while 390 of the 452 palm oil mills in Malaysia had done so.

Apart from that, Sathia said the market would also need massive support from the government amid the current low prices of crude palm oil (CPO).

“So we will have to watch and see how the government will engage the industry in addressing the most important export commodity in the country amid the current low prices situation,” he told Bernama, adding that challenges from the EU and India-Malaysia trade relations would also be the focus of the new minister.

At the close today, the CPO futures contracts for March 2020 and April 2020 fell RM112 each to RM2,336 and RM2,352 per tonne respectively, May 2020 retreated RM119 to RM2,332 per tonne, and June 2020 was RM116 lower at RM2,337 per tonne. 

Source : The Edge Markets