KUALA LUMPUR: The crude palm oil (CPO) price is expected to be traded above RM3,000 per tonne on average for this year driven by the movement of demand in the market, said Plantation Industries and Commodities Minister, Tan Sri Bernard Dompok.
“The price of any commodity depends on demand and supply situations,” he told reporters after officiating the inaugural Palm Oil Economic Review and Outlook Seminar, here yesterday.
The seminar on, ‘Palm Oil: Driving the Economic Transformation’, was organised by the Malaysian Palm Oil Board (MPOB).
Dompok said increased demand for food will drive demand for all commodities including palm oil with positive economic sentiments.
The average CPO price last year increased by 20.8 per cent or RM464.50 to RM2,701 per tonne against RM2,236.50 per tonne in 2009, said Dompok.
He said prices traded wider during the year, with the highest monthly average CPO price recorded in December at RM3,620 per tonne and the lowest attained in July at RM2,453 per tonne.
CPO prices were traded at RM2,549.50 per tonne during the first half of last year, supported by positive sentiment, related to supply tightness of vegetable oils in the world market and low domestic palm oil stocks.
During the second half of the year, Dompok said, bullish market sentiments supported by firmer crude oil prices and coupled with world vegetable oils supply tightness, especially that of palm oil and soybean oil, boosted the positive price sentiment.
This, he said, resulted in an increase in the second half of the year average CPO price to RM2,837.50 per tonne.
The crude palm oil futures contracts reached an all-time high of 48,704 for the daily volume yesterday while surpassing the previous record of 41,879 on Nov 18, 2010.
Asked about this, Dompok said, “The palm oil industry is part of that for oil and fats.
“Production elsewhere affects the demand for palm oil.
“People look at almost everything, such as weather patterns, production, oil prices going beyond US$100 per barrel and the changing global economic situation before they decide to buy.” Earlier, in his keynote address, Dompok said the export of palm oil products increased by 2.8 per cent to 23.06 million tonnes last year from the 22.43 million tonnes recorded in 2009.
He said the increase in the export of Malaysian palm oil products was the result of a coordinated effort by the government and industry members in engaging with global players, coupled with a favourable market situation.
He highlighted that efforts in strengthening bilateral ties and an improvement in trade arrangements had widened the Malaysian palm oil market’s penetration.
China continued to maintain its position as the largest palm oil market for Malaysia for the ninth consecutive year, with total imports of 3.48 million tonnes, followed by Pakistan (2.13 million tonnes), European Union (2.06 million tonnes), India (1.17 million tonnes), the US (1.03 million tonnes), Egypt (940,000 tonnes) and Japan (550,000 tonnes).
These seven markets together accounted for 11.37 million tonnes or 68.2 per cent of total Malaysian palm oil exports last year. — Bernama