Malaysian experts hint at firming up of palm oil prices

The Malaysian Palm Oil Council today predicted that palm oil prices would firm up over the next five-six months and that productivity is likely to be affected by about 10 per cent due to the El Nino impact on its output and other oilseeds.

The council also said the export of palm oil from Malaysia to India is likely to go up this year from 3.9 million tonnes as demand for palm oil is projected to go up and amid lower supply of other oils.

Palm oil on the boil Speaking on the sidelines of a meeting on Malaysian India Palm oil event, Yusof Basiron, Chief Executive Officer of Malaysian Palm Oil Council, along with A Fajarazam, Consul General of Malaysia for South India, said, “globally, the production of oilseeds has been impacted due to the adverse impact of El Nino. This is likely to lead to a drop in production of not just oil palm but also soya bean and other oilseeds.”

“This will result in some volatility in the commodity market. This, in turn, will impact palm oil prices, which may increase from $650 per tonne to $700 per tonne,” he said.

Malaysia along with Indonesia accounts for a major chunk of the total global palm oil production, with Malaysia accounting for about 35 per cent and producing about 19.96 mt of palm oil. Of this about 3.9 mt was exported to India in 2015, he said.

“The Malaysian palm oil industry is experiencing turbulent times on the back of several factors, both internal and external. And yet we are bullish about the demand from India. We have seen the trade between India and Malaysia grow substantially in past years. Having taken measures to improve yield, we expect to meet the growing demand,” he said.

A Malaysian delegation is in India interacting with industry players to explore the possibility of increasing the usage of palm oil in various other applications beyond cooking.

At the meeting here, palm oil players from within Indian and abroad sought to explore new avenues of collaboration with their counterparts.

India is faced with an import bill of over Rs 70,000 crore for edible oil, which is next only to petroleum and gold imports.