Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 10): Average crude palm oil (CPO) for 2017 is expected to range between RM2,700 and RM2,800 per tonne with higher production from 2016, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.

"The average CPO price for 2016 was RM2,600, although it fluctuated substantially ... from RM2,200 in January and ending about RM3,200 in December. It was because of lots of outtakes by certain countries and production was also down in 2016.

"The average price was higher in 2016, compared to RM2,300 in 2015. Analysts are saying that for 2017, the average price might be RM2,700 to RM2,800 per tonne. 

Production is expected to be higher and we hope the revenue would be higher this year. I will release the figures soon," he said.

Mah told reporters the major factor for the price movement would be an increase in demand by consuming countries.

"We are intensifying efforts, including palm oil marketing programmes by the Malaysian Palm Oil Council (MPOC), to ensure sustainable demand in various countries due to competition from soya oil and rapeseed oil, and fellow palm oil producers (overseas)," he said on the sidelines of the annual Reach & Remind Friends of the Industry Seminar and Dialogue.

Mah added Malaysia would be penetrating Iran this year, following lifting of the four-year economic embargo by U.S. and the European Union (EU) last year.

"This will follow a free trade agreement between us and Iran this year. Iran and the Middle East markets are potentially big markets. We are also looking at South America, the non-EU countries (to expand)," he said.

Malaysia also plans to diversify into new markets in the Association of South East Asian Nations (ASEAN), such as Thailand and Philippines, which could make the region its third-largest export market.

In his speech earlier, Mah said the mounting pressure from EU, particularly in the form of the French tax on CPO, could trigger a domino effect across the economic bloc, where governments might resort to imposing similar import tax on the oil.

"Palm oil has been unfairly taxed. It is taxed on tonnage instead of value, while the other vegetable oils are not taxed.

"Although proposals to impose the French tax have been defeated or rather deferred, it will re-emerge in debates in 2017. We are also witnessing several new proposals by European Members of Parliament (MPs), linking deforestation with palm oil and pushing even harder for certified and traceable palm oil," he said.

Mah later added he reminded the French MPs last year that Malaysia might retaliate against French products, if it went ahead with the tax imposition.

However, in December last year, the Parliament voted against imposing the tax, he said.

The tax, if passed, would have resulted in a surge of over 200% in annual oil palm tax by 2020, from a maximum of €90 per tonne now.

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