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POINTERS 2014 MPOC
Palm Oil Internet Seminar
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Section 1: Palm Oil Price Fundamentals:
Malaysia's Palm Oil Supply and Demand Balance for 1st Half 2017 and Outlook for 2nd Half
Dr Ahmad Kushairi Din

Dr Ahmad Kushairi Din is the Director-General of the Malaysian Palm Oil Board (MPOB). He graduated with a B.Agric.Sc, two Msc and PhD in quantitative genetics. Dr. Kushairi specializes in oil palm breeding and genetics, where together with his team of breeders, bred 13 new varities, and prospected oil palm germplasm in Africa and South America. He authored and co-authored 270 publications. He is well connected with the scientific community and the oil palm industry both locally and abroad. He sits as a Board of Directors in Ministries and companies, member of national committees, active in professional societies and President of The International Society for Oil Palm Breeders (ISOPB). Dr. Kushairi had served MPOB and the oil palm industry for nearly four decades since 1979.
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Mr. N. Balu

CAREER HISTORY: • 33 years of experience in the palm oil industry – in the area of Market Intelligence/Research, Market Promotion & Market Development; Designing and Executing Counter-Trade / Offset Deals and Palm Oil Credit Payments Arrangement (POCPA) • Malaysian Trade Negotiator for Bilateral, Regional, Plurilateral and Multilateral FTAs & WTO Trade Negotiations (Focussing on Commodities) : Trade in Goods/Market Access, Rules of Origin and Trade Facilitation. • Former Newspaper Editor with the New Straits Times (in charge of Beriteks) • Former Economics Research Officer with the Consumer Association of Penang (CAP) • Chairman of Global Economics and Marketing Conference, PIPOC 2015 & 2017 • Chairman of Palm Oil Economic Review & Outlook Seminar, 2016 & 2017 • Chairman of Palm Industry Labour: Issues, Performance & Sustainability (PILIPS), 2016 • Chairman of Roundtable on Oils & Fats Global Situation, Palm Oil Familiarization Programme, POFP 2016 • Presenter of Seminar Papers at International Conferences EDUCATION & PROFESSIONAL QUALIFICATIONS: • Certificate in Middle Management, CBI, Rotterdam, Holland. • Bachelor of Social Science (Hons in Economics & Management), USM, Penang. • Graduate Diploma with Distinction (Business Studies), RMIT University, Melbourne, Australia. • Master in Business Management (International Marketing), RMIT University, Melbourne, Australia. • Certified Practising Marketer (CPM), AMI, Australia. • Fellow of the Australian Marketing Institute, Australia. • Management Representative (Services) and Lead Internal Auditor for ISO 9001:2008, MPOB MEMBERSHIP: • Malaysian National Shipping Council (MNSC Treasurer) • Committee Member for Commodities Customs Classification, Royal Malaysian Customs Department.
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The Malaysian oil palm industry had experienced strong El-Nino phenomenon in 2015/2016, which seriously impacted the palm oil production in 2016, thus affected the performance of the industry. However, between Jan-June 2017, the industry has witnessed a significant recovery in crude palm oil (CPO) production from the El-Nino phenomenon in which CPO production was 14.8% higher as compared to the corresponding period of 2016. During the same period, export of palm oil products recorded increased by 7.2% as compared to the first half of 2016. The higher export was influenced by firmer price of palm oil together with increased demand from Iran, Saudi Arabia, China, Pakistan and EU, arising from lower imports of soyabean, rapeseed and rapeseed oil. The higher export demand had motivated higher imports and lower closing stock for the first half of 2017. Imports of palm oil for the first half of 2017 showed a substantial increase of 40.2% due to higher demand from domestic processing sector. Meanwhile, palm oil stocks for June 2017 was closed at 14.0% lower as compared to the corresponding month of 2016. This paper will provide an overview of the performance of the Malaysian oil palm industry for the first half of 2017 vis-à-vis the first half of 2016, covering CPO production, imports, stocks, exports and local consumption, as well as the projection for the second half of 2017.


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Questions & Answers (5) :
Jessie Fan
3 months ago
Dear Mr Balu, There was talk recently that Indonesia propose toraised Indonesia CPO export levy to USD107 from curret USD50 to balance the competition between Indonesia and India after India raised import taxes for CPO to 15% n RBD PL to 25%. What is your view on this and how would if affect the market?
Balu A/L Nambiappan:
As regards to the Indonesian recent proposal to raise the crude palm oil (CPO) export levy to USD107 from current USD50, it is their Government’s prerogative to do so. However, as far as Indonesian producers are concerned, they do not object to the levy since taking CPO out of the market place has raised the palm oil prices by more than the levy. As for the Indian decision to raise import taxes imposed on CPO to 15% and RBD Palm Olein to 25%, the immediate impact that we could observe is that there would be a likely increase in import of CPO at the expense of processed palm oil (PPO). This is due to their preference towards CPO. However, over time market forces shall come into play given that India is only 30% self-sufficient in edible oils and needs to continue to depend on imports to meet its domestic oils/fats supply-demand gap.
3 months ago
Mohamad Raid Majzoub
3 months ago
Dear Dr.Dr Ahmad Kushairi Din and Mr. N. Balu, Does MPOB has an idea why the local consumption is reduced as well? is it due to the removed subsidy on the PO or due to the increase of consumption of others soft oils. Thank you.
Balu A/L Nambiappan:
Local palm oil consumption for the period Jan-June 2017 was lower as compared to the same period in 2016 due to higher palm oil exports. Total exports of oil palm products during the period amounted to 11.23 million tonnes, higher by 4.1% as against 10.78 million tonnes during the same period in 2016.
3 months ago
YAP YAU KOONG
3 months ago
Dear Dr Kushairi & Mr Balu, Slide 7 showed a significant decline in OER in Sabah and WM. Is this decline the effect of haze? Is there any research done to study the impact of haze on FFB yield and OER?
Balu A/L Nambiappan:
Sabah and West Malaysia recorded lower OER during Jan-June 2017 as against Jan-June 2016’s OER due to lower quality of FFB processed by Palm Oil mills. To date no research has been done on the impact of haze on FFB yield and OER.
3 months ago
YAP YAU KOONG
3 months ago
Dear Dr Kushairi & Mr Balu, Slide 11: Why is there a significant decline in export to India (-21.8%)? And what is the measures taken by the country to win back exports to India considering it has one of the largest population in the world?
Balu A/L Nambiappan:
The significant decline of exports of palm oil to India (-21.8% ) to 1.12 million tonnes vis-à-vis 1.43 million tonnes previously was attributed to the increase import of sunflower oil, which was by 55.4% to 996,000 from 641,000 tonnes and higher intake of Indonesian palm oil, up by 34.4% to 2.28 million tonnes during January-April 2017. Some of the measures that have been undertaken and considered to win back exports to India are as follows : I. Enhancing trade co-operation and promotion activities in importing countries. For this purpose, MPIC through MPOB has opened office in Mumbai, India ; II. Increasing market demand through promotion, exhibition, trade fairs as well as technical missions to promote and raise awareness about the advantage of Malaysian palm oil and III. Branding of Malaysian palm oil through Malaysian Sustainable Palm Oil (MSPO)
3 months ago
Anthony Yap
3 months ago
Hi Dr Ahmad Kushairi & Mr N. Balu; on your slides #7. I) Can you explain why the Sabah OER has been dropped by (3.1%)? Is it consider significant? II) What was the average yearly OER for Sabah? thanks
Balu A/L Nambiappan:
Sabah OER recorded a decline of 3.1% in Jan-June 2017 as compared to OER performance in Jan-June 2016 and the 3.1% drop is considered as significant. The decline was mainly due to lower quality FFB processed by oil palm mills. Average Sabah OER in 2016 was recorded at 21.11 percent, while in Jan-June 2017 was 20.31 percent.
3 months ago
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