KUALA LUMPUR: Palm oil industry players have more reason to celebrate following expectations of crude palm oil (CPO) trading better this year, as an average price of RM2,700 to RM2,800 per tonne has been forecast for 2017 compared with about RM2,600 per tonne last year.
Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong said total industry revenue of Malaysia’s palm oil sector is also expected to be higher in 2017 on the back of a higher CPO production.
“In 2016, we experienced a challenging market due to the lower palm oil production caused by the El Nino phenomenon and a slump in demand from our major buyers.
“However, the situation will improve for Malaysia’s palm oil sector, as a better outlook for both the supply and demand sides is anticipated,” Mah told a press conference at the Reach and Remind Friends of the Industry Seminar 2017 and Dialogue here yesterday.
Malaysia’s palm oil industry was the largest contributor to the agricultural gross domestic product at 46.6% in 2015, with more than 70% of the agricultural land utilised for oil palm cultivation. Last year, Malaysia accounted for 30.4% of global palm oil production and 37.1% of world exports.
Mah said the Plantation Industries and Commodities Ministry planned to further diversify CPO exports to international markets such as Iran, South America and the non-European Union countries. The ministry and other related agencies are also looking at intensifying exports to India, one of Malaysia’s biggest palm oil importers. In 2015, Malaysia’s palm oil export reached a whopping RM60bil.
Mah added that the Government is focusing on empowering Malaysian smallholders in the domestic palm oil sector.
“We have about 550,000 oil palm smallholders in Malaysia and the Government is looking at various measures to improve the productivity and competitiveness of smallholders,” he said, adding that smallholders received subsidies worth RM7,500 per ha for replanting purposes.