POINTERS: Malaysia's Palm Oil Supply and Demand Updates for 2019

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Questions & Answers (16) :

Ken

5 years ago

what is the average price you expect during 2019?

Edmund Yong

5 years ago

1) What is your forecast CPKO closing stock for 2019? 2) Price outlook for CPKO 2019?

Fatah

5 years ago

Malaysia palm oil stocks is high. Any chance the government will introduce cooking oil subsidy so that Malaysian can again enjoy cheap cooking oil price.

POINTERS SECRETARIAT:
Posted on behalf of the speaker : Cooking Oil Prize Stabilization Scheme (COSS) is currently under purview of KPDNHEP. Under this scheme, the cooking oil subsidy is allocated for packaging of 1kg plastic and 1 litre bottle. At this moment, the consumers can still enjoy buying cooking oil at subsidized prize.
5 years ago

Azwan Fitri Bin Zainal Abidin

5 years ago

Hi, Believe domestic consumption is once of the factor that contributing in stabilize the MPO prices. Question is,what is current approach and way forward approach for the industry player or the policy makers to strengthen the domestic consumption? excluding the mandate B10 bio-fuel. And if you were to rate in scale 1(least awareness) - 10(great awareness), what is your rating on Malaysian awareness towards the goodness of the Palm Oil? Thanks,

Nur Fairuz

5 years ago

The market always say that Indonesia export tax and levy has made Malaysia palm oil exports non-competitive. How do you explain the fact that despite that talk Malaysia refining capacity did not fall still maintaining at 60+ per cent since the introduction of Indonesia’s new export tax structure. Can you explain how the Malaysian palm oil players adjust their business approach and maintain its competitiveness amidst this new competitive landscape created by Indonesia.

POINTERS SECRETARIAT:
Posted on behalf of the speaker : There were 50 refineries in Malaysia with total operational capacity of 26.24 million tonnes in 2018 and the utilisation rate of the refineries are still maintaining at above 60 per cent. This is to cater demand from domestic processing sector, particularly oleochemicals plant and biodiesel sector. In 2018, processing activities by both oleochemicals plant and biodiesel sector increased by 12.7% compared to 2017. MPOB does not have the information on how industry players adjust their business approach and to remain competitive. Each industry players have their own business strategies and measures to ensure their competitiveness in the business. They have to know what the markets need and adjust accordingly.
5 years ago

MOHD RAFIZAN BIN SAMIAN

5 years ago

Will the implementation of MSPO in Malaysia be successful and will we achieve 100% MSPO certified plantation by 2020?

POINTERS SECRETARIAT:
Posted on behalf of the speaker : Ministry of the Primary Industry was very committed that implementation of MSPO certification by the Malaysian oil palm industry will achieve 100% by end of this year. According to MPOCC, as of 31st January 2019, 26% planted area has been certified with MSPO. The rest of the industry that are not certify yet was now in the stage of preparation before proceed to MSPO audit and get certify. The awareness on MSPO among industry now also increase if we can compare certification achievement between 2017 and 2018. By end of this year, we will see a big number of achievements made by the Malaysian Palm Oil Industry players towards MSPO certification.
5 years ago

MOHD RAFIZAN BIN SAMIAN

5 years ago

Why does Malaysia imports the palm oil from other countries when we in Malaysia produce tonnes of this oil?

POINTERS SECRETARIAT:
Posted on behalf of the speaker : Despite producing tonnes of oil, Malaysia still imports some amount of palm oil from various sources, particularly Indonesia. Imports are normally undertaken to fulfill contract obligations based on either Malaysian or Indonesian delivery and to supplement lower production of palm oil to cater local processing sector.
5 years ago

HCLeow

5 years ago

How is the progress of replanting in Malaysia? How many hectares were replanted in 2017 and 2018?

POINTERS SECRETARIAT:
Posted on behalf of the speaker : Oil palm replanting in Malaysia are recorded to have an increasing progress in 2018 as compared to 2017. Total replanted oil palm area in 2018 have reached 101,698 hectares, an increase of 1.1% or 1,148 hectares as against 100,550 hectares in the previous year.
5 years ago

Tester01

5 years ago

2019 forecasted Palm oil Stocks at 2.50. The possible factors from your numbers is coming from domestic use, what is the basis for the strong domestic use ?

POINTERS SECRETARIAT:
Posted on behalf of the speaker : The ‘strong domestic use’ is mainly based on the implementation of the higher blending mandate for biodiesel programme in 2019. Biodiesel utilization for B10 programme in transport sector is estimated at 533,589 tonnes/year. In addition, B7 programme for industry sector will be introduced and made mandatory beginning July 2019. Biodiesel utilization for B7 programme in industry sector is estimated at 226,916 tonnes/year.
5 years ago

Anthony Yap

5 years ago

Hi Datuk /Mr Balu; based on your CPO production in 2019 is projected 20.30 mil mt. It looks like difficult to achieve. Normally 2 years post El-Nono session 1998/1999; CPO production trend to lower after 2 years. Meaning this year 2019; the production should be same or lower. As the trees need to rest after 2 years recovery from El-Nino 2015/2016. Please comments, Thanks

POINTERS SECRETARIAT:
Posted on behalf of the speaker : It is true that it takes maximum 2 years for recovery from El-Nino, based on the complete fruit formation cycle. Based on our statistics, the 1997/98 El-Nino caused the Malaysian CPO production in 1998 shrunk by 8.3% y-o-y and recovered in 1999 by 26.9% growth y-o-y. If the 2015/16 El-Nino event follow the same trend as the 1997/98 event, the 2019 CPO production should free from the impact from the previous El-Nino.
5 years ago

nasihah rashid

5 years ago

total of smallholders that has achieved the MSPO to date? and having said that there are still a bigger gap to achieve the certification by 2020, what are the measures taken by the government to assist smallholders? In previous report, the ministry of Primary Industries said that they will be working hand-in-hand with smallholders in the plantation sector to achieve Malaysian Sustainable Palm Oil (MSPO) certification, are these initiative already start? What are other initiatives that will be taken besides this?

POINTERS SECRETARIAT:
Posted on behalf of the speaker : As of 18 Feb. 2019, for independent smallholders, 24,881.38 Ha (2%) areas with the total number of 6,888 smallholders were certified with MSPO. For organised smallholders, 192,737 ha (28.24%) were certified with MSPO. Currently, MPOB is using the Sustainable Palm Oil Clusters (SPOC) to certify the independent smallholders. Independent smallholders have to become the SPOC members that was managed by MPOB officer to get them certify with MSPO. There are 162 SPOC established by MPOB throughout Malaysia and 95 SPOC were certified. The number of smallholders certified will increase from time to time during surveillance and special audit where the smallholders are added into the SPOC. MPOB also rearranging the staff where 550 officers now being in-charge of MSPO certification of smallholders. Before this only 200 staff involved. MPOB also work together with industry players and NGO for smallholder certification. There are millers and dealers that are actively collaborate with MPOB to certify the smallholders that supply the fruit to them. NGOs also playing and important role to expedite the certification of smallholders through enhancement of MSPO requirement checklist and outreach programme. To cover the cost of certification, government has provided incentive for MSPO certification. This incentive covers the cost of training, cost of auditing, Personal Protective Equipment (PPE) and chemical rack for independent smallholders at the cost of RM135/ha.
5 years ago

Roby Fauzan

5 years ago

Please define favorable weather, is it longer sunshine? good rainfall distribution? good timing of rainfall? because many still say that we are still facing likelihood of El Nino threat in 2019

POINTERS SECRETARIAT:
Posted on behalf of the speaker : Our definition of favourable weather are as follows; Evenly distributed annual rainfall of 1500-2000 mm or more, without a defined dry season; Maximum average temperature of 29 to 33 degree Celcius and a minimum average temperature of 22 to 24 degree Celcius; Constant sunlight of at least 5 hours per day. By referring to ENSO, there is a possibility for the mild El-Nino to happen in the first quarter of 2019. However, we believe that this would not significantly affect the production of palm oil in Malaysia.
5 years ago

Chong Hoe Yeen

5 years ago

Indonesia, being one of the major producer of CPO, has been steadily implementing biodiesel mandate. The B20 programme has been successful since implementation in 2016 and government is currently looking to further improve it to B30. However, Malaysia are just looking to implement B10 mandate by second half of 2019. Why is there such a gap when both countries are not having too much of an advantage in resources over each other? Is R&D being carried out proactively to prove the benefits of biodiesel over petroleum diesel? Are the result being promoted to both manufacturing sectors and the public? Are there any communication in place between the government and sectors who utilize diesel, e.g. automotive or machinery, to carry R&D in improving their engines to cope with the B10 blend or even higher?

POINTERS SECRETARIAT:
Posted on behalf of the speaker : Phased-in B10 programme for transport sector has been started since December 2018 and made mandatory beginning February 2019. In addition, B7 programme for industry sector will be introduced and made mandatory starting July 2019. Malaysia has progressively moved in stages and steadily implementing its biodiesel programme. R&D in biodiesel has been proactively carried out and the results were shared to the public and relevant stakeholders; i.e. petroleum companies, car manufacturers, FMM, MBA, related government agencies, etc. The consultations were also frequently conducted with stakeholders prior to implement the B10 programme. Furthermore, continuous engagement with MBA, petroleum companies and other relevant parties is constantly being carried out for the B10 blend and beyond. MPI and MPOB will work with relevant government agencies and stakeholders towards implementing B20 in the future. The plantation companies are urged to support the B20 trial programme when approached by MPOB.
5 years ago

Chong Hoe Yeen

5 years ago

Believed that one of the reason that palm oil is being banned by EU is because of the non-sustainability. Currently in Malaysia almost 70-80% of plantations are not MSPO/RSPO certified. What are the steps being taken by MPOB to create betteer awareness in the industry? Is there any solid and firm plan to ensure all plantations in Malaysia to get MSPO certified and subsequently RSPO certified?

POINTERS SECRETARIAT:
Posted on behalf of the speaker : Currently, 30% plantation in Malaysia certified with MSPO. To expedite the certification, Government has made an announcement that by 1st January 2020, all smallholders, estates, and millers have to be certified with MSPO. For refineries, kernel crushers, oleo-chemical and biodiesel, they also have to be certified with MSPO Supply Chain Certification Standard by end of this year. MPOB as the regulatory body for the Malaysian oil palm industry are responsible to enforce mandatory MSPO certification starting 1st January 2020. The requirement of MSPO certification has been added into the MPOB licensed condition. It means that premises without MSPO certification on 1st January 2020 will be penalised by MPOB through a certain mechanism. Malaysian Government only targeted 100% for MSPO certification. For RSPO certification, it is up to the industry decision because it is business to business arrangement. But for Sabah, Sabah state government has committed to ensure 100% RSPO certification by 2025.
5 years ago

YAP YAU KOONG

5 years ago

In order to break away from the normal commodity price fluctuation, Malaysia should look at supplying to niche markets with special high-quality palm oil. Is MPOB willing to spearhead and work with the industry to change the method of producing palm oil of high quality to meet such specialised markets?

POINTERS SECRETARIAT:
Posted on behalf of the speaker : High Quality finished products for a niche market can only be produced from high quality feedstock/raw material. MPOB is currently working with PORAM and other industry members to improve the quality of CPO by proposing new specification for CPO especially in addressing the 3MCPDE/GE issues. A new technology will be identified and introduced to the industry based on on-going industrial trial to improve the quality of palm oil products. This will automatically address the needs of specific market that requires high quality palm oil.
5 years ago

YAP YAU KOONG

5 years ago

Malaysian palm oil has always been a price taker of the world oils and fats. With Indonesia and the few Asian countries like Thailand and Philippines combined, we should have some influence in the oils and fats market and should be able to command some premium in palm oil against other vegetable oils. Is there any efforts to form a coalition with the other Asian palm oil producing countries instead of undercutting each other?

POINTERS SECRETARIAT:
Posted on behalf of the speaker : Despite palm oil being an important component of the global food chain from developing countries traded globally, it still faces trade impediments in major importing countries for various reasons. Future development of palm oil industry and efforts to address trade impediments in palm oil industry need to be carried out through mutual cooperation among oil palm cultivating countries. Thus, in order to strengthen cooperation and collaboration among oil palm cultivating countries, Council of Palm Oil Producing Countries (CPOPC) was established. The objective of the Council is to promote, develop and strengthen cooperation in the oil palm cultivation and industry among the Member Countries as well as to ensure long term benefits of such palm oil endeavours to the economic development and well-being of the people of the Member Countries. The cooperation charter of the establishment of CPOPC was signed formally by the founding members, Malaysia and Indonesia on 21 November 2015 in Kuala Lumpur. Malaysia has assumed CPOPC Chairmanship effective 1st January, 2019 for a period of 2 years (after Indonesia since the establishment). CPOPC membership is open to all other oil palm cultivating countries on the basis of inclusiveness. As of November, 2018, Colombia is the new member of CPOPC.
5 years ago