Bright outlook for palm oil next year, says MPOB

Kuala Lumpur: The outlook for the country's palm oil sector next year is bright on the back of higher global demand. Malaysian Palm Oil Board (MPOB) Director-General Dr A. Kushairi Din said the US and Indonesia's commitment to boost biofuel usage, coupled with China's positive response towards increasing oil palm import from Malaysia would be a boon to the industry.

"Apart from China, the European Union and the UK are among Malaysia's top palm oil importers.

"This will help increase the exports of palm oil, including crude and processed palm oil from Malaysia," he told Bernama on the sidelines of the 2016 National Seminar On Palm Oil Milling, Refining, Environment and Quality (POMREQ 2016) here, Tuesday.

A. Kushairi said the demand for vegetable oil still outpaced the supply, with the ratio of the world population to global vegetable oil production was estimated at six billion: 200 million tonnes, while the global palm oil production was about 60 million tonnes.

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"Hence, besides rising demand of vegetable oil, more palm oil will be utilised and this helps increase its price," he said.

Meanwhile, A. Kushairi also expressed confidence that Malaysia's palm oil output would pick up in the second half of next year after slowing production in the first half of the year.

"The El Nino and El Nina effects have curbed production this year, increasing the country's stockpiles from 1.6 million tonnes to 1.7 million tonnes, but still lower than the threshold of two million tonnes.

"This has helped maintained the price of the commodity between RM2,800 to RM2,900 per tonne at present," he said.

However, he reiterated that the board would continue to manage the inventory at the current level next year by continuing the replanting exercise, a practice implemented since five decades ago.

Earlier, Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong said the global palm oil demand was projected to grow by another 40 per cent to about 78 million tonnes by 2020.

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"I am confident that the commodity will remain as an important product in the global oils and fats market to meet the growing needs of the global population," he said.

Mah's speech was read by his deputy, Datuk Datu Nasrun Datu Mansur. – Bernama

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