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POINTERS 2014 MPOC
Palm Oil Internet Seminar
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Section 1: CPO Price Trend:
Global Oils & Fats Outlook 2018 on CPO Price Trend
By: Marketing And Market Development Division, MPOC

The Marketing & Market Development Division spearheads the promotion and marketing activities of Malaysia Palm Oil in the effort to make it the leading oil in the global oils and fats market. The aim is to create and establish a positive image for Malaysia Palm Oil in order to maximise returns to the Malaysian palm oil industry. Market Expansion This Division enhances the growth of the Malaysia Palm Oil market through new developments and the expansion of existing markets. To compete successfully, innovative approaches are developed. Various proactive programmes targeting trade and consumer markets are carried out to extend into new markets. In addition, new opportunities for investment, cooperation abroad and joint marketing are constantly being sought out to obtain a greater market foothold. Seminars Trade fairs and seminars such as Palm Oil Trade Fair and Seminars (POTS) showcase the products and services of palm oil producers and sellers, while broadening their business opportunities. At these events, business contacts and participants are updated with information and knowledge about the palm oil industry. Market Networking The development of a market intelligence network, market linkages and awareness programmes helps foster closer ties with industry-related bodies. These strategies help to educate and influence those who have a keen interest in Malaysia Palm Oil, i.e. policy makers, the trade community, consumers, scientists, medical professionals and researchers.
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This paper will analyse issues that will affect palm oil price in the second half of 2018 such as demand and supply analysis and we will also take into account the influence of the current rise in crude oil price on palm oil. Demand for palm oil from major consuming countries such as India, China, EU and USA are other factors taken into account. The regional analysis on the demand and supply scenarios will be aggregated at the global level to forecast the price, demand and supply balance in the second half of 2018.


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Questions & Answers (12) :
Azwan Fitri Bin Zainal Abidin
3 months ago
Hi Sir, CPO vs SBO spread will it maintain USD80/MT? What is your forecast as trade dispute between China-USA?
Izham Hassan:
The CPO v SBO price spread will likely favour higher palm oil demand. The China- US trade dispute will make China look towards other suppliers of soybeans especially from Brazil & Argentina. However, the supplies from these two countries will not be sufficient to replace the supply shortfall from USA. This will drive SBO price higher andwiden the price gap which will work in favour of palm oil and CPO price
3 months ago
Azwan Fitri Bin Zainal Abidin
3 months ago
Hi Sir, What is your forecast price for CPKO 2018 and CPKO 2019?
Izham Hassan:
CPKO is a lauric oil and its price is also influenced by the price and availability of coconut oil. Our forecast is that CPKO price will likely trade around RM3,500/MT until end of the year as the higher expected output of palm oil and coconut oil is factored in. In 2019 it should remain steady within a narrow price band of 7% to 10% variance. At this point we do not foresee any new bearish factors which could adversely affect CPKO price.
3 months ago
Samsudeen Ganny
3 months ago
Dear Sir I understood that many four seasons countries use palm oil as speciality fats in their margarine, ghee and shortenings productions not much for cooking oil. Due to lack of knowledge in the recipes of the batch production there is limitations of CPO/RBDPO used for the productions of the fats. How do you see that the promotions of this knowhow will enhance the use of more of the palm oil thus enhancing the export volumes throughout the year?
Izham Hassan:
Palm oil products are widely used in food processing and are generally the preferred choice due to the advantages they possessed in their semi solid and solid consistencies with varying melting points. Solid fats are normally required in processed food products for their functionality and stability. Palm and palm products have the natural solids required whereas other vegetable oils lack consistency and hence required to be hydrogenated which is expensive and produces trans fat as a result. Some products for food processing may be of general formulations suited for general purpose use while others required specific formulations pertinent to the specific requirements demanded by the foods. From the processing viewpoint, technical promotional efforts are required especially in the emerging markets where one of the key elements is to develop the food industries. Palm oil is definitely the natural choice and adoption of the recipes or formulations well suited to the process will enhance demand for more palm oil. The adoption of such products are less subjected to seasonal changes and could be use throughout the year.
3 months ago
Dr. Ahmad Mustafa
3 months ago
Dear Sir Thank you for the informative presentation slides. What are the Egyptian consumption of palm oil in 2017 and 2018; and the Egyptian imports of palm oil from Malaysia 2017 and 2018f?
Izham Hassan:
Thank you for your question Based on Oil World data, Egypt imported 816,000 tonnes palm oil in 2017. As for palm oil imports from Malaysia, in 2017 Egypt imported 192,000 tonnes while in the first 6 months of 2018, Egypt imported 42,000 tonnes palm oil from Malaysia
3 months ago
Amalina Zainudn
4 months ago
Hi, just wondering with current production growth will Malaysia still be able to achieve 20.3 Mln MT ? And for Indonesia , the 38.9 Mln only covers palm or is it inclusive of cpko as well? thank you
Izham Hassan:
Malaysia is on track to produce 20.3 million MT palm oil in 2018 as we are now into our peak production months. As for the 38.9 MT from Indonesia, it covers palm oil and does not include CPKO.
4 months ago
Khun Pyay Thein
4 months ago
Dear Sir/Madam, how is this year production forecast and next year production? Will the price be on uptrend from this month onward? what is the price range for this year and next year. Will India be able to lower import tax in this year? Will China be able to import more on palm oil due to trade war issue?
Izham Hassan:
1. Global palm oil production is forecast at 70 million tonnes in 2018 while in 2019 we forecast that it could reach 74 million tonnes 2. Palm oil price will move very slightly upwards over the next few weeks as Malaysia will be in the peak production months which may hamper any price recovery 3. The price range for this year will be at an average of RM2,410/MT while for 2019 it could reach as high as RM2,800/MT as the soybean trade war will have an impact on edible oil prices worldwide 4. India is not likely to reduce import duties in the near future as it is a protection measure for their domestic farmers and refiners. 5. China will likely import more palm oil as a result of their trade dispute with US as it would affect their soybeans import. To satisfy their requirement for oils and fats, palm oil is the most affordable oil in the market and may see higher demand from China.
4 months ago
FAIZUL RIZAL BIN ANUAR
4 months ago
Dear sir/madam.. what is the CPO price forecast looklike in the next 5 years, or in the next 2 years at least?
Izham Hassan:
Palm oil price will likely be on a slight upward trend over the next two years and may even breach RM3,000/tonne by 2020. As for the next 5 years, palm oil price could fluctuate between a wide price range.
4 months ago
Yong Than Yee
4 months ago
Just a random thought, based on MPOC detailed knowledge base; any SUR % range that is supportive for CPO prices ?
Izham Hassan:
Based on our SUR, it has always had an inverse relationship to CPO prices thus a lower SUR would lead to higher CPO prices
4 months ago
TRINH
4 months ago
Dear Sir/madam How is market trend for palm Kernel oil? Please advise
Izham Hassan:
Market trend for palm kernel oil has always been on an increasing trend. Palm kernel oil is a lauric oil used mainly in the oleochemical and manufacture of soaps, washing powders and personal care products
4 months ago
Yong Than Yee
4 months ago
May I ask for the formula for the stock usage ratio? Slide 47/50 - SUR = % of (End Stk / Consumption) - agree perfectly Slide 44/50 - SUR does not match up ?
Izham Hassan:
The formula used is Ending Stocks / (Consumption+Exports)
4 months ago
Syamimi
4 months ago
Your China forecast reported a 4.1% decrease or 364,000 MT reduction in edible oil imports by China. How does your forecast tie-up with the USA-China trade war issue which would benefit imports of some type of edible oil especially palm oil.
Izham Hassan:
Currently the US-China trade dispute has not had any immediate impact on edible oil prices. Whatever happens will be highly speculative in nature. Nevertheless, in the months ahead though, China will struggle to replace the U.S. beans, forcing them to pay either the extra duty or find substitutes which may make them look to palm oil for supplies
4 months ago
Candy Lee
4 months ago
Dear sir, 1 plot of land can plant how many palm oil tree?
Izham Hassan:
The standard planting for palm oil is between 140 to 147 trees per hectare
4 months ago
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