Selangor Journal
Workers collect oil palm fruits at a plantation in Sepang, on December 2, 2008. — File Picture REUTERS

Palm Oil Board expects CPO to hover around RM4,000 a tonne

KUALA LUMPUR, Nov 7 — There will be little change to Malaysia’s production of palm oil for this year as compared with 2022, with the price of crude palm oil hovering around RM4,000 per tonne, according to the Malaysian Palm Oil Board (MPOB).

“As we move towards year-end, we are still hoping that we can get more than what we achieved last year, which is 18.5 million tonnes,” MPOB director-general Datuk Ahmad Parveez Ghulam Kadir said.

Ahmad Parveez said the country’s crude palm oil (CPO) production for the first nine months of 2023 is just 0.5 per cent lower than the same period last year.

He said this at the MPOB International Palm Oil Congress and Exhibition (PIPOC 2023) here today.

Ahmad Parveez noted that September and October usually would be good months for production, but the recent changes in the weather pattern have changed it.

He also said that the effect of El Nino would only be seen in the next six months.

Meanwhile, Ahmad Parveez said CPO demand is expected to increase slightly ahead of the festive season, with India restocking CPO for Deepavali followed by China and Muslim countries for Chinese New Year and Ramadhan and Hari Raya Aidilfitri.

Earlier, he gave a presentation where he highlighted seven challenges faced by the industry, namely the sustainability issues, allegations of deforestation and destruction of biodiversity, climate change, food safety issues and productivity.

Stressing the need to enhance sustainability, Ahmad Parveez said the government has rescheduled the transition period of the Malaysian Sustainable Palm Oil (MSPO) 2015 or MSPO 1.0 standards to the revised MSPO 2022 or MSPO 2.0 from August 2023 to December 2024.

“Companies and smallholders are given a 17-month period to upgrade their practices to the revised MSPO standards, which comprises eight parts,” he said.

The MSPO standard was designed to strike a balance between economic prosperity, environmental protection, and social development and was introduced in 2015 and contained five principles comprising management commitment and responsibility; transparency; compliance with legal and other requirements; responsibility to social, health, safety, and employment conditions; and environment, natural resources, biodiversity and ecosystem services.

Palm oil remains one of the Malaysian economy’s most vital sectors, contributing 3.04 per cent to the gross domestic product in 2022, with a total export revenue of RM137.89 billion.

Engaging the European Union

Meanwhile, Council of Palm Oil Producing Countries (CPOPC) secretary-general Rizal Affandi Lukman said sustainable palm oil is the solution to meet the increasing global demand for palm oil.

Updating on the latest efforts by CPOPC, He said that among the latest CPOPC efforts to promote palm oil, the council conducted a working visit to three European Union (EU) member states of the EU, Italy, the Netherlands and Belgium, for engagements with policymakers and stakeholders and to obtain on-the-ground information of the current state of play of readiness for implementation of the EU Deforestation Regulation (EUDR).

“We have proposed to the European Commission an inception phase for a smooth transition to ensure continued supplies of certified sustainable palm oil meeting the requirements of EUDR.

“They should also have a consultative engagement during the drafting of implanting acts to ensure pragmatic guidelines considering the relevant input and feedback from producing countries,” he said.

On benchmarking, Rizal said there is a need for clear methodology and transparent data, as well as close communication with producing countries in the process in view of its potential negative impacts on the producing countries.

Role in food security

Malaysian Palm Oil Council director, Marketing and Market Development Faisal Iqbal said global consumption of oils and fats is on a steady rise, with palm oil poised to play a pivotal role in ensuring worldwide food security.

“Currently, Malaysia contributes approximately 23.3 per cent to global palm oil production and holds a significant 31.1 per cent share in global palm oil exports.

“Traditional markets like India, China and the EU are important, but we need to focus on emerging markets and sectors,” he stressed.

He added that markets in Asean, the Middle East and African regions had shown consistent growth, and certain sectors will continue their growth trajectory and will be markets of interest for Malaysian suppliers.

— Bernama

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