Despite high crude palm oil (CPO) price, the commodity is still competitive vis-a-vis major competing vegetable oils in the world like soyoil, sunflower and rapeseed, said a senior official of the Malaysian Palm Oil Council (MPOC).
MPOC deputy chief executive officer Dr M. Kalyana Sundram said it was not just palm oil price that had increased but prices of all other vegetable oils and fats had also spiralled in tandem.
“Though palm oil and soyabean prices have increased, the price difference between the two edible oils has been maintained,” he told Bernama at the just-concluded Malaysia-Egypt Palm Oil Trade Fair and Seminar 2010 (POTS Egypt 2010) here.
Dr Kalyana Sundram said though the palm oil price hike might result in some pressure on end-users, it would not be easy for them to switch overnight. Despite the higher price, Dr Kalyana Sundram said the dedicated palm oil users would continue to use the commodity.
“After being engaged in palm oil trading or having used palm oil for more than 30 years, the end-users understand the oxilation that happens in the marketplace.
“They know price fluctuations occur and are to be anticipated over a cyclicle period and despite that they will continue to use palm oil. Despite all said and done, you will see that palm oil is still being featured as the cheaper oil among other major competing oils,” he said.
Currently, CPO price is hovering at RM3,000 a tonne.
Research houses, OSK Research and ECM Libra, have been reported as saying that “demand destruction” would start if CPO prices soar excessively high.
OSK said the price upside was expected to be between RM3,300 and RM3,500 a tonne while ECM Libra said if the CPO price touched RM4,000 a tonne, a “pullback” in demand could happen.
This scenario was seen in 2008 when high CPO prices proved counter-productive to demand and as a result, stock levels ballooned to an all-time high of almost 2.3 million tonnes, triggering a price decline.
On the POTS Egypt 2010 from Nov 7 to 9, Dr Kalyana Sundram said the event was a continuous effort by MPOC in collaboration with the Malaysian Palm Oil Board (MPOB) to enrich the knowledge on palm oil among end-users.
The POTS Egypt 2010 opened by MPOC chairman Datuk Dr Lee Yeow Chor was the 17th series of Palm Oil Trade Fair and Seminar organised at international level. “The event is gaining increasing recognition with overwhelming response from participants. In the past, there were only 200 participants, but at the POTS Egypt 2010, we had 270 attendees. So, there is keen interest in the event,” said Dr Kalyana Sundram. – Bernama
Source: The Star