PUTRAJAYA: The 2019 novel coronavirus (2019-nCoV) outbreak in China is expected to have only a temporary impact on commodity prices, especially crude palm oil (CPO).
“Of course, prices will come down but this (will) only (be) a temporary phenomenon … not only on commodity prices, but share prices are also going down,” Primary Industries Minister Teresa Kok told reporters after the Reach and Remind Friends of the Industry Seminar 2020 and Dialogue here today.
The seminar was organised by the Malaysian Palm Oil Council (MPOC).
Commenting on the falling CPO demand from India, she said it was a temporary glitch and would be resolved by both countries.
“Having long standing bilateral ties, I sincerely believe our two nations will overcome this, and a mutually beneficial outcome will prevail,” she said, adding that her ministry together with the MPOC and agencies would continue to tackle this challenge as well as the anti-palm oil campaign in Europe.
The Malaysian palm oil industry continues to contribute robustly to the nation’s economic development and according to Kok, the industry is now the fourth largest component in the national economy.
“From January to November 2019, Malaysia’s total exports of palm oil and its downstream derivatives stood at 25.7 million tonnes, an increase of 10.9% from 23.2 million tonnes in the same period in 2018.
“Although this generated an income of more than RM59 bil to the country, it is a decline of 5.9% compared to 2018’s revenue of RM62.7 bil for the same time frame,” she said.
Palm oil has now become a leading vegetable oil globally and Malaysia is the second largest exporter accounting for 20.1% of global oils and fats export.
“Indeed China, India, the European Union, the US and Japan are among the major palm oil export destinations for Malaysia,” she added.
Meanwhile, the MPOC has forecast the CPO price to average at around RM2,600 to RM2,700 per tonne this year.
“The high CPO price is expected to continue with the implementation of the B20 biodiesel mandate this month, as well as other factors including lower CPO stocks and a decrease in production,” said MPOC.
On the sustainability front, about 3.87 million ha or 66.22% of the total plantation areas of 5.85 million ha have obtained the Malaysian Sustainable Palm Oil (MSPO) certification as of Feb 3.
Some 88.76% out of 0.68 million ha of the total area for organised smallholders have been MSPO-certified, while about 10.17% out of 0.97 million ha have been certified for independent smallholders. – Feb 4, 2020, Bernama
