Palm Oil Prices to Remain Bullish

Dompok sees strong price for the commodity in the next five months

SANDAKAN: Palm oil prices are to remain bullish in the next five months due to the crop-damaging weather in the United States, India’s doubling of taxes on refined products and the approaching El Nino phenomenon.

In promising a bright outlook for the commodity, Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said: “I don’t see anything disastrous coming our way.

“Prices are higher now and if the US drought continues as expected, then there will be more demand for palm oil and prices will go up,” he told reporters after a visit to the Trushidup Palm Oil Mill.

Soybeans and corn prices hit new record high Friday, given the unrelenting drought in the US that lowered soybean oil supply, which is expected to push up edible oil prices and crude palm oil (CPO) will benefit from the rise.

Last week, India, the world’s biggest edible oil importer that mainly buys palm oil from Malaysia and Indonesia, lifted a six-year freeze on the base import price of refined palm olein.

CPO prices are expected to rise following India’s move and Malaysian exporters will benefit as palm oil exports from Indonesia are likely to fall.

Research houses have estimated average CPO prices for this year to hover between RM3,100 and RM3,500 a tonne.

Meanwhile, on the much talked-about pollution in Kinabatangan River in Sabah and in Sarawak, with palm oil mill effluents (POME) discharge as one of the causes, Dompok said the government and the Malaysian Palm Oil Board (MPOB) were actively evaluating the capacity of existing mills to achieve 20 parts per million (ppm) Biological Oxygen Demand (BOD) consistently.

For Malaysia generally, the BOD limit for discharge into the water course is 100 ppm.

A Felda farmer collects oil palm fruits in Hulu Selangor. Research houses have estimated average CPO prices for this year to hover between RM3,100 and RM3,500 a tonne. — Reuters

However in Sabah, Sarawak and in environmentally-sensitive areas, more stringent conditions have been imposed. For new oil palm mills, a 20 ppm BOD requirement, coupled with land irrigation, have been imposed in Sabah.

Dompok said river water quality would not be compromised.

There are 428 palm oil mills in the country, of which, 124 mills are in Sabah, making the state the largest CPO producer in Malaysia.

“The MPOB, Malaysia Palm Oil Association and the Department of Environment are working closely to ensure mills treat POME to the lowest BOD level.

“They should conduct an evaluation of the existing treatment plants to ascertain their capacity to consistently meet the 20ppm requirement.

“If all stakeholders work together, the POME issue can be handled effectively to ensure the industry’s sustainability,” he added. – Bernama

Source : The Star

For more news update visit our  Facebook

You can share this posts:

Leave a Reply