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Second Half 2015 - Anticipating Market Price Direction:
Malaysian Oil Palm Industry Performance - First Half 2015
By: Ms. Norihan Binti Husain

She started her career in Palm Oil Registration and Licensing Authority (PORLA) in 1987 as Administrative officer and has been in the Economics and Industry Development Division since the merger of PORLA and PORIM into MPOB. During her tenure, she has led various groups in the compilation and dissemination of data covering various sectors of the Malaysian oil industry including the plantation, processing, export and import. She is currently the Head of Industry Development Unit and responsible for the Release of the Monthly Oil Palm Industry Performance every 10th of the month as well as publications on statistics on the Malaysian oil palm industry. She graduated from Indiana State University, USA with Bachelor of Business Administration, majoring in Marketing and Master of Business Administration (MBA) from Central Missouri State University, USA
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The Malaysian oil palm industry has witnessed tremendous growth in the last few decades. Today, oil palm plantings has reached 5.5 million hectares occupying close to 70% of Malaysia’s agriculture land. In 2014, CPO production reached 19.7 million tonnes, while exports of oil palm products was recorded at 25.1 million tonnes with an export value of RM63.6 billion. The first half of 2015, however, have been very challenging for the Malaysian oil palm industry. Heavy rainfalls and flash floods at the end of 2014 and early 2015 had severely affected production, especially in the first quarter of 2015. Despite the lower production, high carry-over stocks coupled with high imports and low export demand had pushed palm oil stocks to above 2 million tonnes at the end of June 2015. Weaker vegetable oils prices and lower Brent crude oil price put a toll on Crude Palm Oil price thereby, affecting export revenue. This paper will provide an overview of the performance of the Malaysian oil palm industry for the first half of 2015 vis-à-vis the first half of 2014, covering oil palm planted area, productivity, exports, imports, stocks and the prices of oil palm products, as well as the expected development for the second half of 2015.


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Questions & Answers (6) :
Mohammad Jaaffar Ahmad
2 years ago
Finally, you have forecasted that the total palm oil export from Malaysia in 2015 will be 17.8 mil. MT. How much of this export will be in the form of CPO? Do you think more CPO will be exported from Malaysia this year compared with 2014? If yes, what is the reason?TQ
Norihan:
Dear En Jaafar, En Ayat forecasted that CPO exports for 2015 to be 4.72Mn T, marginal increase of 0.4% against 4.70 Mn T recorded in 2014. while exports of PPO at 13.08 Mn T against 12.61 Mn T or an increase of 3.7%. The increase in CPO exports is due to expectation of Malaysian CPO export duty to remain at 0% for most months in SH2015; and impact from Indonesia's new CPO export levy.
2 years ago
Mohammad Jaaffar Ahmad
2 years ago
TQ Ms. Norihan. Can you give a breakdown of the exports of palm oil into CPO and PKO for Jan-June 2015 compared to Jan-June 2014? Similarly can you do the same for palm kernel oil i.e. CPKO and PPKO for similar time period.
Norihan:
En Jaafar, the breakdown of PO exports is as follows: FH2015 (CPO 2.15MnT PPO 5.68Mn T) FH 2014 (CPO 1.76Mn T PPO 6.37 MnT) Exports of PKO FH 2015 ( CPKO 138,331T, PPKO 366,614T) FH 2014 (CPKO 130,227T, PPKO 369,986T)
2 years ago
Mohammad Jaaffar Ahmad
2 years ago
TQ Ms. Norihan. What is the reason for the 3 folds increase in palm oil import in Jan-June 2015? What is the breakdown of the import i.e CPO and PPO?. There was also a 3 folds increase in palm kernel oil import. Can we have the breakdown and the reasons for that too ?.
Norihan:
The increase in palm oil and palm kernel oil imports were to supplement the lower palm oil and palm kernel oil production and to cater to the demands from the local processing sectors. Imports of palm oil: FH 2015 ( CPO 283,116T, PPO 181,490T) FH 2014 (CPO 33,777T, PPO 110,554T) Imports of PKO: FH 2015 (CPKO 138,068T, PPKO 15,640T) FH2014 (CPKO 34,200T, PPKO 19,696T)
2 years ago
Kazmi
2 years ago
Thank you Ms Norihan. Besides excess rainfall and poor quality fruits, do you think lack of labour in harvesting which affected the harvesting rounds had some influences on lower OER in Pen Malaysia, Sabah and Sarawak.
POINTERS SECRETARIAT:
Uploaded on behalf of Ms. Norihan Binti Husain. Dear Mr Kazmi, Thank you for your question. Labour is one of the key contributors to productivity. Malaysia has always faced labour shortage especially in the oil palm plantation sector. As rightly pointed out by you, shortage of labour has affected harvesting which has an impact on FFB yield as well as OER. The labour problem faced by Malaysia is year-round, whereas the excessive rainfalls is specific to a certain period.
2 years ago
Mohamad Raid Majzoub
2 years ago
Dear Ms. Norihan Binti Husain, Thank you for the useful presentation. Can i know the reason why the FFB Yield and Oil Extraction Rate in P.Malaysia is lower than Sabah. Also i am interested to know the FFB Yield in Indonesia.
POINTERS SECRETARIAT:
Uploaded on behalf of Ms. Norihan Binti Husain. Dear Mr Mohamad Raid, Among the reasons for the lower FFB yield in Peninsular Malaysia compared to Sabah is due to the high percentage of oil palms in Peninsular Malaysia from second generation plantings. Coupled with that, the more acute labour shortage problem in Peninsular Malaysia has contributed to the lower FFB yield and OER. Apart from that, heavy rainfalls could also affect the FFB yield and OER. I wish I have some statistics on FFB yield in Indonesia to share with you, but unfortunately I don’t
2 years ago
Ng Yong Ming
2 years ago
Thanks Ms. Norihan for your great slides.
Norihan:
You are most welcome
2 years ago
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