Palm Oil Internet Seminar

Opportunities, Challenges And Trend In 2015 CPO Price:
Global Oils and Fats Outlook 2015
By: Tan Sri Datuk Dr. Yusof Basiron

TAN SRI DATUK DR. YUSOF BIN BASIRON aged 66, a Malaysian. He is presently holding several important positions which include: i. Chief Executive Officer of Malaysian Palm Oil Council (MPOC) ii. Director of Sime Darby Berhad iii. Chairman and Director of CBIP Berhad Apart from holding distinguished corporate positions, he is also involved in other organizations which are: (i) Senior Fellow and Past President of Academy Sciences Malaysia (ASM) (ii) Fellow member of Malaysia Scientific Association (MSA) (iii) Fellow member of Malaysian Oil Scientists' and Technologists' Association (MOSTA) (iv) Fellow member of the Incorporated Society of Planters His notable academic achievements are as follows: i. In 1972, he obtained his Bachelor in Chemical Engineering Degree from the University of Canterbury, New Zealand; ii. In 1974, he obtained his Post-Graduate Degree in Rubber Technology (ANCRT) in the United Kingdom; and iii. In 1976, he obtained his Masters Degree in Engineering specializing in Industrial Management (M.E.) and also in Business Administration (MBA) from the Catholic University of Leuven in Belgium. Before he joined Palm Oil Research Institute of Malaysia (PORIM) in 1979, he held the position of Rubber Technologist/Techno-Economist with the Rubber Research Institute (RRI)/Malaysian Rubber Research Development Board (MRRDB). In 1986, he completed his doctorate with a PhD in Applied Economics and Management Science from the University of Stirling, Scotland. He was later appointed as the Director-General of PORIM in 1992. He held the position for 8 years until April 2000 before assuming the role of the Director-General of Malaysia Palm Oil Board (MPOB), an organization which existed as a result of a PORIM and Palm Oil Registration and Licensing Authority (PORLA) merger, from 1 May 2000 until 18 January 2006.
For the year 2015, we forecast that the global oils & fats production will for the first time exceed 200 million MT driven by good weather which will prevail in the oilseed producing areas. Production is expected to reach 202 million MT and this will be about 6 million MT higher than the estimated production in 2014. Palm oil production is poised to exceed 61 million MT and again will play a crucial role in the global supply of oils and fats.

Malaysia and Indonesia, the top two palm oil producing countries will continue to contribute to this growth as the combined production from these two countries will be about 85% of the total global palm oil production. Palm oil produced from Malaysia and Indonesia is indeed vital as both these countries will contribute to almost 30% of the total global oils & fats production.

We are now observing the strengthening of palm oil prices despite the recent fall in global crude oil prices. The recent major floods which occurred in Malaysia in December 2014 helped boost prices on a short term as there were concerns about supply shortage. These are among some of the issues that will be highlighted in this paper.

This paper will analyse issues that will affect palm oil price in 2015 such as demand and supply analysis and we will also take into account the influence of the current drop in crude oil price on palm oil price especially in the first half of this year. Demand for palm oil from major consuming countries such as India, China, EU and USA is nevertheless, expected to remain upbeat and we will take these factors 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 2015.

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Questions & Answers (4) :
9 years ago
YBhg. Tan Sri Datuk Dr. Yusof Basiron. Thank you for your insightful presentation. I have 2 questions for you. 1. There was a mention of the set-up of a new council for MSPO. What is the latest update on this please? 2. With reference to carbon footprint. How will it be possible for the palm industry to come onto this agenda nationally? (The questions was posted by POINTERS secretariat on behalf the participant as the participant choose to remain anonymous)
Yusof Basiron
9 years ago
Declining prices for two or three consecutive years indicate oversupply in the market but low prices will stimulate demand which will cause prices to recover, hence market will expect prices to rise again in the next season. Other factors to stimulate demand are the continuing growth in world population of 70 to 80 million per year and growth in GDP. Supply is usually affected by weather which cannot be perfect for three consecutive years. PO prices will therefore rise and fall accordingly in the future as they did in the past.
A.K.M. Fakhrul Alam
9 years ago
Dear Tan Sri Datuk Dr. Yusof Basiron, Thank you for an in-depth presentation. I have two questions, which are as follows: 1. The slide on CPO prices shows that during the period 2006 - 2014, there had been repeatedly ups and downs in the prices of CPO. As the year 2013 and 2014 witnessed a declining trend in CPO prices, is the increasing trend imminent in next one or two year ? 2. What are the main factors that control the prices of CPO? Will the ups and downs in CPO price occur again and again despite steady increase in demand of palm oil ?
Mohamad Raid Majzoub
9 years ago
Dear Tan Sri Datuk Dr. Yusof Basiron, Thank you for the useful presentation as usual.
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