Palm oil exports this year seen at RM50b

MALAYSIA'S palm oil exports are expected to fetch about RM50 billion this year, its first annual drop in four years, as current prices at RM2,200 per tonne is only half of last year's record high.

"It is likely to be lower than last year's record high, but higher than in 2007, provided palm oil prices are sustained at current levels," Malaysian Palm Oil Board (MPOB) chairman Datuk Sabri Ahmad said.

Last year, palm oil exports reached an all-time high of RM65.2 billion. "The last time we saw a dip in exports was in 2005. Prices then were somewhat subdued compared to the previous year," he told Business Times in a telephone interview yesterday.

While export value is likely to dip this year, it is important for Malaysia to gain global market share."Indeed, palm oil is a value-for-money food ingredient serving the mass global population. In terms of volume, we've shipped out 11.7 million tonnes, 5 per cent more than in the same nine months last year," Sabri said.

Having just returned from a palm oil trade mission to the US, Sabri said there was still a lot of untapped market potential in the US. "In California alone, there is a sizeable ethnic population to whom we can introduce blended cooking oils with added phytonutrients," he said.

From January next year, restaurants in California are required by law to get rid of trans fat from their menu. Palm oil can be blended with other vegetable oils to make trans fat-free baking fats and deep-fry oils.

According to the latest update from the MPOB, Malaysia exported RM36.5 billion of palm oil in the first nine months of this year. The top five buyers were China, Pakistan, India, the US and Europe.

Malaysian Palm Oil Council chief executive Tan Sri Yusof Basiron, in a separate telephone interview, agreed with Sabri about the potential of the North American market. "In a globalised market, palm oil is increasingly seen to complement soyabean. Journalists and analysts like to say palm oil is in direct competition with soybean, but, in reality, food manufacturers prefer blended oils and fats," he said.

Yusof explained that oils and fats were usually blended to meet the American Heart Association's recommended dietary oil requirements to improve blood cholesterol ratio. Essentially, the blended edible oil should contain an equal composite of saturated, mono-unsaturated and poly-unsaturated fatty acids.

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