During closing, the benchmark CPO futures contract added RM44
by SHAHEERA AZNAM SHAH/ pic by TMR FILE
THE Malaysian Palm Oil Board (MPOB) expects potential higher crude palm oil (CPO) demand as countries replenish their inventories.
MPOB chairman Datuk Ahmad Jazlan Yaakub said this will benefit CPO prices towards year-end.
At the closing of yesterday’s trade, the benchmark CPO futures contract on the Bursa Malaysia Derivatives Exchange added RM44 to RM2,782 per tonne.
“We hope the CPO prices will increase (towards year-end) along with the increasing demand in palm oil export after businesses begin to operate.
“We have built a good relationship with other countries thus far. For example, India that is ready to uplift the restrictions on Malaysian palm oil and this will contribute to the increase in palm oil prices,” he said at the launch of the tocotrienol programme in Bandar Baru Bangi, Selangor, yesterday.
Indian traders have reportedly resumed their purchases of Malaysian palm oil in May after restricting any purchase of the refined palm oil since January.
In May, Malaysia announced a 100% exemption on export duties for CPO, crude palm kernel oil and processed palm kernel oil beginning July 1 until Dec 31, 2020.
Beginning of this year, India revised its import policy for the palm oil purchases, restricting the import volume of refined bleached deodorised (RBD) palm oil and RBD palm olein from any countries.
Between January and May, India trimmed about 93% or two million tonnes of its palm oil import from Malaysia to 151,106 tonnes compared to its purchases of 2.16 million in 2019, according to data by MPOB.
The import volume was normalised in June when the country’s imports jumped more than fourfold to 246,045 tonnes compared to the previous month.
While palm oil demand this year has been hit by the coronavirus pandemic, the export volume has begun normalising as Malaysia recorded a total 9.58 million of export volume between January and July, only 1.19% down compared to the same period in 2019.
Separately, Ahmad Jazlan said the government and the palm oil agency would continue to promote Malaysian supplement products consisting of tocotrienol to the global market.
Tocotrienol is a chemical compound found in Vitamin E, which is largely found in palm oil. According to MPOB, 70% of the Vitamin E derived from palm oil is made up of the chemical compound.
In 2019, the exports of tocotrienol supplements contributed about RM1 million to the country’s export revenue.
“The tocotrienol has received the ‘Generally Recognised as Safe’ label from the US Food and Drugs Administration, which allows the usage of tocotrienol in the food production in the US.
“It also has been gazetted under Malaysia’s Food Act and labelled as permitted supplements,” he added.