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POINTERS 2014 MPOC
Palm Oil Internet Seminar
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Section 1: CPO Price Trend:
Malaysia's Palm Oil Supply and Demand Updates for 2018
Datuk 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 showed a sterling performance in 2017. Crude palm oil (CPO) production witnessed a significant increase following recovery from the impact of the El-Nino phenomenon a year earlier. In relation to global demand, higher palm oil prices and improved export demand in 2017 helped push export earnings. The first half of 2018, however, showed a mixed performance of the Malaysian oil palm industry. CPO production and export demand increased, while imports declined as compared to the corresponding period of 2017. On the other hand, high carry-over stocks coupled with equally high production had pushed palm oil stocks to above 2 million tonnes during the first half of 2018. Weaker vegetable oil prices had put a toll on CPO 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 2018 vis-à-vis the first half of 2017, covering oil palm planted area, productivity, exports, imports, closing stocks and the prices of oil palm products, as well as the expected development for the second half of 2018.


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Questions & Answers (9) :
Samsudeen Ganny
1 month ago
Dear Ybhg Datuk Recently I read in the papers that the YB Minister is proposing for increase in the subsidy to increase from B7 to B10. On personal note it is big mistake you are encouraging inefficiencies in the biodiesel productions and secondly with present subsidy at 30% capacity of plant operation is a break-even. To enable to draw more of CPO there must be other means not subsidy at the expense of tax payers monies or planters taxes. What should be the substitute to subsidy to industry to sustain the objective of consuming CPO and sustainability of biodiesel production? Thank you.
Balu A/L Nambiappan:
Biodiesel programme is a green agenda for the country. The whole world is also going after green development for sustainable development depending on a country’s resources. To preserve the environment by reducing air pollution or greenhouse gasses (GHG) emission in transportation sector, the Government has introduced the biodiesel programme, which is built on the strength of abundant raw materials; i.e. palm oil in Malaysia. The subsidy for biodiesel provided by the Government is similar to the renewable energy (RE) fund of 1.6% surcharge on all electricity bills for implementing the Feed-in-tariff Mechanism enabling electricity generated from renewable resources, such as solar power. The current subsidy of fuel is a general subsidy that enjoyed by all petrol and diesel fuels users. Biodiesel being a part of fuel mixed will thus be subsidized like diesel when Government decided to subsidize fuel. In fact, the subsidy for diesel and petrol is much higher as compared to the biodiesel. It is important to note that the fuel subsidy is finally given back to the tax payers when the fuel is purchased at petrol kiosks.
1 month ago
Tey Poh Leng
1 month ago
Referring to table Malaysian Imports of Palm oil and Palm Kernel (Jan -Jun 2018/2017), PK (Palm Kernel) imported come from which countries?
Balu A/L Nambiappan:
Imports of palm kernel were mainly sourced from Indonesia (more than 70%), while the rest came from Thailand and Cambodia.
1 month ago
Tey Poh Leng
1 month ago
Why 2.5 folds jump up in Palm Kernel (PK) import?
Balu A/L Nambiappan:
The 2.5 folds increase was due to higher palm kernel demand from kernel crushers for crushing activities, which amounted to 2.38 million tonnes or up by 9.7% during the first half 2018.
1 month ago
HCLeow
1 month ago
Dear Datuk/Mr Balu, can you advise what is the domestic disappearance and palm oil import MPOB assume to derive the end stock of 1.99m tonnes by end-2018? Thank you.
Balu A/L Nambiappan:
The 2018 closing stocks forecast of 1.99 Mn T was not derived based on domestic disappearance and imports of palm oil, as we believed that the two do not represent the major portion of the Malaysian palm supply-demand balance. Instead, the forecast is based on the assumption that the CPO production for the second of 2018 would be lower than the initial expectation. In addition, the forecast also takes into consideration the expectation of higher export of palm oil, especially on CPO driven by the expectation of zero CPO export duty in several months of the second half 2018 due to lower palm oil price in the market place.
1 month ago
Anthony Yap
2 months ago
Hi All, Slide #11; Export to India has been increased by 24.3% 1.39mi mt 2018 vs 1.11mil mt in 2017. Why the increase 24.3% so much as we knew that India increased/imposed historical high of impact duty on Palm Oil in 1Q 2018?
Balu A/L Nambiappan:
Despite the higher effective import duty imposed on palm oil products (CPO -48.4% & PPO -59.4%), exports of palm oil to India increased significantly by 24.3% during the first six (6) months of 2018. This was partly due to the implementation of Malaysia’s CPO export duty suspension during January-April 2018, which saw higher exports of CPO (0.98 million tonnes) to India. Another contributing factor was low intake of soyabean oil from Argentina, down by 49.0% to 291,000 tonnes during Q1 of 2018 from 571,000 tonnes during Q1 of 2017.
1 month ago
Samsudeen Ganny
2 months ago
Ybhg Datuk & Mr. Balu The original strategy of biodiesel industry was to absorb 1 Million MT of CPO should we move on to the B10. However I did not hear anything beyond B7. Latest info Indonesia progressing into B20 and the President made a announcement they may go to B30. Although we are caught between the Automobile manufacturers warranties beyond B7 and petroleum companies reluctance but Indonesia can forge ahead how is it?
Balu A/L Nambiappan:
Malaysia has been very careful in all decision making, especially on the national programme like biodiesel implementation. Recently, the Ministry of Primary Industries (MPI) together with MPOB have had few consultation meetings with stakeholders, chaired by YB Minister of MPI and had received various feedbacks from stakeholders. The Government is aware of the Indonesian B20 programme and will be realigned with all stakeholders before firming up date of decision on B10 implementation. It is just a matter of timing to implement B10 at the most appropriate time. At the same time, MPI and MPOB hope that the oil palm industry can support the B10 programme as it helps to support the palm oil prices. The plantations, millers and refiners are encouraged to use B10 in your own estates or company’s vehicles to show support and problem-free operation of using B10. This will help to boost the confident of B10 for the general consumers at large.
1 month ago
Anthony Yap
2 months ago
Hi Datuk/Mr Nalu a) Can you advise what is the export figures and trend of Oleochemical in First half 2018 vs 2017? b) What is the export figures and trend for Biodiesel export from Malaysia. c) Out going of export figures on (b) above come from which port? Eg: PK, PG or Sabah?
Balu A/L Nambiappan:
During the first half 2018, exports of both palm-based oleochemicals and biodiesel showed upward trend, with their exports amounted to 1.48 million tonnes (up by 17.6%) and 0.20 million tonnes (up by 51.6%) compared to first half 2017. As for the biodiesel, the exports were largely from Pasir Gudang Port.
1 month ago
Syamimi
2 months ago
TQ. MPOB’s Jan-Jun figure shows that Peninsula Malaysia process 95% of the CPO produced. Sabah 77% and Sarawak 70%. It paints a picture of a situation that Peninsular Malaysia has hardly got CPO to export. Almost all CPO exported is from Sabah and Sarawak. Is it true? Sarawak refining capacity of 3.1 million MT is lower than its production capacity of 4.1 million MT in 2017. Yet, based on local delivered basis, CPO price in Sarawak is comparable to Peninsula and Sabah price. What is the economic justification for this type of price been formed? Would you be able to explain why Sawarak palm oil industry is position such that their refinery capacity is lower than its production.
Balu A/L Nambiappan:
Malaysia emphasises more on processed palm oil export. On average, exports of CPO consist only about 15- 20% of total palm oil export and it can go up to 35% in months where CPO export duty is 0%. Based on Jan-June 2018 figures, exports of CPO from Peninsula Malaysia accounted for 37% while the rest came from Sabah and Sarawak. CPO is mostly used for value addition by palm-based downstream industries which are mostly located in Peninsular Malaysia. Palm-based downstream industry in Sarawak is still in development stage. This is because only starting in 2013, Sarawak has emerged as the 2nd largest of CPO producing state in Malaysia, arising from more new oil palm planting area have begun to produce FFB. In line with these developments, the processing capacity of the palm oil refinery in Sarawak has increased from 2.93 million tonnes in 2013 to 3.12 million tonnes in 2017. On the local delivered CPO price difference between the three regions, CPO price in Sarawak is relatively lower than that in Peninsula Malaysia, but higher than that of Sabah. The price is not formed or set by MPOB, instead it was based on prices reported by the industry to MPOB.
1 month ago
GEO
2 months ago
any possibility that we may have even lower production compare to the 2017?
Balu A/L Nambiappan:
The outlook for 2nd Half 2018 was explained in the report (Malaysian’s Palm Oil Supply & Demand Updates – Page 9 – 10).
1 month ago
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