PETALING JAYA: The increase in crude palm oil (CPO) price which is hovering near RM2,500 per tonne is an indication that the price will continue to rise up to next year, said Primary Industries Minister Teresa Kok Suh Sim.
She said among the factors that would support the price increase was a higher demand for the commodity amid the trade war between the United States and China which caused the reluctance of companies in the world’s second-largest economy to buy the US soybeans.
“Malaysia will also start its B20 biodiesel programme next year and Indonesia will implement the B30, hence, this will further increase the demand for palm oil.
“I’m happy (with the price increase). Even though our palm oil industry faces various challenges and the price is already low from last year to this year…now we see the indication that it will continue to rise till next year,” she told reporters after launching Love MY Palm Oil Healthy Lifestyle campaign at Sri Tanjung Apartment, USJ 16, Subang Jaya, near here yesterday.
On Wednesday, the CPO futures market rose to its highest level in 18 months with the benchmark January 2020 contract month hitting RM2,496 a tonne before declining slightly to RM2,462 a tonne on Friday due to profit-taking.
“This can generate income for the smallholders and companies. They will be more relieved and able to improve their living standards,” she said.
Plantation expert, Thomas Mielke of ISTA Mielke GmbH recently said that palm oil production in Malaysia is expected to drop slightly in 2020 from the 20.5 million tonnes recorded in 2019 and would push the CPO price to trade higher at RM2,600 a tonne for the first half of next year.
Indonesia would also experience a slowdown in production growth by 1.8 million tonnes in 2020 to 43.6 million tonnes from 45.4 million tonnes this year.
Kok said the government will continue to promote the benefits of palm oil not only in foreign countries but also in Malaysia to contain the anti-palm oil campaign which is expanding to several countries worldwide.
One way is through the implementation of the Malaysian Sustainable Palm Oil (MSPO), which is based on the European standard.
According to Kok, more than 55 per cent of the oil palm-planted areas in Malaysia are certified with the MSPO.
The government targets to achieve 100 per cent of oil palm plantations to be MSPO-certified by year-end.
In the 2020 Budget, the government has allocated RM30 million for research and development matching grants to encourage cooperation between industry and academics to increase value-add in palm oil utilisation in the downstream sector especially tocotrienol in pharmaceuticals and bio-jet fuel.
“The matching grants will be channelled specially to the Malaysian Palm Oil Board, the institution that carries out research on palm oil. It will coordinate the tocotrienol and bio-jet fuel study,” said Kok. – Bernama
