Archive for March 2014

Nod for Boustead Plantations IPO

KUALA LUMPUR: BOUSTEAD Holdings Bhd (BHB) shareholders and previous unitholders of Al-Hadharah Boustead REIT can soon apply for the Boustead Plantations Bhd's (BPB) restricted offer, without balloting.

BHB said yesterday the Securities Commission had approved of BPB's initial public offering (IPO) which is slated for listing in the second quarter of this year.

About 28 per cent of BPB, or 163.6 million shares, will be allocated to institutional investors and the rest for retail investors.

The retail tranche consists of 492.4 million shares, of which 42 per cent will be allocated to BHB shareholders and 35 per cent to previous Boustead REIT investors.

Basically, the restricted offer is fixed at three BPB shares for every five Boustead REIT shares and one BPB share for every five BHB shares.

BHB said those who apply for at least 100 shares will be guaranteed an allocation of 100 shares. 

Any remaining shares will be allocated to entitled BHB shareholders who apply in excess of 100 shares, on a pro-rata basis according to their respective shareholdings in BHB as per the entitlement date to be announced later.

"BPB's listing will allow us to unlock the value of our investments. Existing BHP shareholders and potential new shareholders will have the opportunity to take part in our good track record of delivering sustained earnings," said BHB deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin.

Upon listing, BPB's total enlarged and paid-up share capital will comprise 1.6 billion shares amounting to RM800 million. BPB is selling up to 656 million shares of its enlarged 1.6 billion share base, comprising 580 new million shares and 76 million existing shares offered by its parent.

Lodin said parent BHB will keep a controlling 59 per cent stake in BPB, which has committed a dividend payout of at least 60 per cent of its profit.

So far, BPB's IPO is the only palm oil-linked listing slated for the year. As palm oil prices are on the uptrend, keen investor interests are expected on pure plantation counters such as BPB.

In terms of tree age profile, BPB's mature and maturing trees, which are between four and 20 years old, make up 77 per cent of its planted area. Immature oil palms of between zero and three years make up nine per cent of its planted area and the balance 13.8 per cent are trees that are past their prime.

To stem any decline in its fresh fruit bunch output, Lodin said in five years, BPB will seek to grow its 71,092.7ha planted area by another 20,000ha.

Palm oil millers' input sought for RE roadmap

PETALING JAYA: THE government is seeking palm oil millers' input to formulate a new renewable energy (RE) roadmap that will see more participation from biomass and biogas plant operators.

Palm oil millers are seen to be practical enablers in using more homegrown technology and content.

"The National RE Policy and Action Plan 2009 is due for a revision to chart the way forward. Currently, the biggest allocation of RE quota goes to solar power but this sector is highly dependent on foreign technology and imports," said Sustainable Energy Development Authority (Seda) chief executive officer Badriyah Abdul Malek.

"There's a need to re-focus the RE industry to add more value to our economy. In moving towards a knowledge-based and service-oriented economy, we want to encourage more use of local technology and content. We see palm oil millers as key enablers of this vision," she said.

Energy, Green Technology and Water Deputy Minister Datuk Seri Mahdzir Khalid had earlier officiated at the Second International Sustainable Energy Summit 2014, here, yesterday.

Seda, a government agency under the ministry, is a one-stop centre that facilitates supply and RE usage in Malaysia via feed-in tariff (FiT).

The FiT guarantees RE producers a premium selling price over that generated from depleting and finite sources such as oil, gas and coal. Power generated from renewable sources, such as oil palm biomass, biogas, mini-hydro and solar, are targeted to benefit from the FiT.

Currently, biomass and biogas only make up 37 per cent of the 536MW RE quota that had been allocated. Oil palm biomass and biogas plant operators, which had successfully bid for the RE quota and accorded licences by Seda, receive 32 sen per kWh under the FiT when they hook up to the national grid.

While acknowledging the sluggish take-up rate among biomass and biogas plant operators, Badriyah said the government is committed to re-balance RE developer interest towards this sector.

Asked if the government may raise the FiT for oil palm biomass and biogas plant operators, she replied: "We're looking to revise the FiT degression rates and bonus incentives." Mahdzir confirmed that changes to the FiT will be announced in the next quarter.

Degression rates reflect the falling cost of technologies, while bonus incentives spur developers to incorporate more homegrown know-how and local building materials in RE production.

Given the relatively limited FiT budget, which is funded by a 1.6 per cent levy on electricity bills of heavy users in Peninsular Malaysia and Sabah, Badriyah said it would be more realistic to spur more participation from the biomass and biogas sector.

Trade coercion on palm oil

MELBOURNE, Australia: ENVIRONMENTAL non-governmental organisations (NGOs) have, for the past decade, been pressuring governments to restrict palm oil imports unless production systems comply with their standards.

Now, commercial coercion joins trade coercion to restrict growth of palm oil trade.

When it comes to commercial coercion, these activists are practised at pressuring consumer goods manufacturers, processors and traders to purchase only palm oil produced according to NGOs' standards. Why go to such lengths?

Commercial coercion works. Major companies fear attacks on their brands. Some chief executives, for example of Unilever, the strongest business backer of the Roundtable on Sustainable Palm Oil (RSPO), even appear to enjoy being lauded by NGOs.

Does trade coercion work? Only if governments allow it to do so. Rules in trade agreements are quite strict.

The restrictions imposed by the European Union on imports of palm oil-based biodiesel are considered by trade experts as wholly in breach of World Trade Organisation (WTO) rules. The United States Environment Protection Agency is considering similar measures. They, too, would breach Malaysia's WTO rights to supply the US market.

It is also probable that efforts by the backers of RSPO to pressure businesses to buy only its certified palm oil breach the Code of Practice attached to the WTO Agreement on Technical Barriers to Trade. It specifies non-governmental certification systems may create unnecessary obstacles to trade. Malaysia can seek to enforce this WTO agreement to ensure this does not occur.

Free trade means businesses are free to compete in foreign markets. The domestic cousin of free trade is free competition.

It is also clear that environmental NGOs are pressuring businesses, such as Wilmar, to deal only with palm oil producers whom they endorse. This is market coercion.

As well as exercising its rights as a member of the WTO to challenge restrictions by others on its palm oil exports, the Malaysian Government is fully entitled to adopt laws or regulations which penalise those who engage in any activity that clamps down the palm oil supply chain and producers' livelihoods.

Normally, free marketers would not advise governments to increase business regulations. But when commercial entities willingly bow to coercion from NGOs to distort trade and markets, it is the consumers and producers who suffer; it is entirely appropriate for governments to adopt regulations which penalise businesses which are complicit in actions that restrict competition.

Alan Oxley is chairman of World Growth, an observer at the United Nations Climate Change Conferences. He formerly served as chairman of the General Agreement on Tariffs and Trade (GATT), the predecessor to the WTO.

Oil palm expansion plan continues

KUALA LUMPUR: OIL palm planters in Sarawak are looking to plant up more of their agricultural landbank as palm oil prices have started to trade higher than RM2,700 per tonne this past month.

Last Friday, the third month palm oil futures on Bursa Malaysia Derivative closed at RM2,796 per tonne. Planters welcome the prospects of higher exports, having braved through dismal pricings of between RM2,200 and RM2,500 in the first 10 months of 2013.

“Higher palm oil prices of around RM2,700 to RM2,800 per tonne this year should contribute to better export earnings,” said Sarawak Land Development Minister Tan Sri Dr James Jemut Masing.

He reiterated that Sarawak is steadfast in its commitment to raise the income and living standard of rural folks through oil palm development.

“Sarawak’s oil palm expansion programme will go ahead as planned. The rise in palm oil prices will help generate extra capital for smallholders to expand their oil palm plantings,” he told Business Times in a telephone interview from Kuching yesterday.

Malaysian Palm Oil Board’s data showed that Sarawak produced 3.1 million tonnes of crude palm oil (CPO) last year. “This year, with more trees maturing, we hope to achieve between five and 10 per cent output growth to 3.3 million tonnes,” Masing said.

In December 2013, Wilmar International Ltd signed a “No Deforestation, No Peat, No Exploitation” pledge in its palm oil trade with consumer goods giant Unilever Plc.

Wilmar’s refinery in Bintulu is the main buyer from 41 palm oil mills across Sarawak, absorbing 1.7 million tonnes of CPO, or 55 per cent of the state’s production.

In sourcing CPO to feed its refinery, Wilmar told planters in Sarawak that it will stop buying oil from palms planted in areas of “high carbon stock” and peat swamp after 2015.

This triggered the ire of planters in the state because Wilmar’s pledge prohibits cultivation of oil palm on peat land and confines the opening up of oil palm plantations to only young scrub and cleared/open areas.

Masing likened Wilmar’s unreasonable prohibitions on its palm oil suppliers to economic bullying. “This directive from Wilmar is very disastrous because it could stop the government’s poverty eradication programmes,” he said.

“The state government will not succumb to baseless allegations. I do not agree with the argument that planting oil palms in logged-over areas and peat swamps is bad for the environment,” he said, explaining that good peat soil management is the basis for sustainable food production and a preventive measure against the spread of fire.

 “We need to differentiate between managed and unmanaged peat,” he said. He explained that land compaction and establishment of a trench system was a pre-requisite to any oil palm development in Sarawak’s peatland. A lot of effort goes into ensuring water levels in the maze of trenches is at 50cm to 75cm from the surface. This is achieved through a series of stops, weirs and water gates.

   “Oil palm planters in Sarawak follow a set of proven, good agricultural practices that balances the needs of people, planet and profits,” he said.

Meanwhile, in an interesting Valentine’s Day twist, Masing noted Wilmar’s “unloving stance” towards its suppliers in Sarawak seemed to have made a U-turn and concede to logic.

In its February 14 letter to Sarawak Land Development Ministry, Wilmar chairman and chief executive officer Kuok Khoon Hong assured that Wilmar’s policy would not affect CPO purchases from oil palm planters which had previously developed large tracts of peat land.

MH370 ... please come back

Many people around the world are praying and anxiously waiting for every bit of progress in the search and rescue for those on board flight MH370.

Meanwhile, flights departing and arriving at Kuala Lumpur International Airport had begun to resume normalcy ... with passengers and cabin crew paying more attention to keeping regular contact with their friends and families.

This is one of the most frequently shared photo on Facebook accounts that had triggered millions of "likes" - a drawing of a plane with multi-coloured hands reaching up with the caption, "Please come back". 

We must never lose hope in finding these 239 people.

KUALA LUMPUR: MALAYSIA Airlines' integrity should not be prejudiced by the disappearance of the MH370 flight as it has a good safety record. "This is a rare incident," said International Air Transport Association (IATA) director-general and chief executive officer Tony Tyler.

In a media conference call from Geneva, Switzerland, yesterday, he recalled that the last fatal incident concerning Malaysia Airlines was 20 years ago and it involved a small aircraft, a Fokker 50.

Six days ago, Malaysia Airlines' MH370 flight from Kuala Lumpur to Beijing went missing. The Boeing 777 had 239 people on board when it vanished off radar screens early Saturday morning, triggering a massive international search effort. Todate, dozens of ships and aircraft from 12 countries continue to scour surrounding seas off Malaysia for the ill-fated aircraft.

Tyler was responding to queries whether the MH370 flight disappearance is causing loss of consumer confidence in Malaysia Airlines and triggering fear of flying among travellers all over the world.

He reiterated that aviation is a safe industry.

"Last year, around 3.1 billion people travelled by air. This year we expect traffic to surpass 3.3 billion passengers. That is nine million people a day with over 6,000 people per minute boarding an aircraft. The global fleet travels some 70,000km each minute," he said.

"We are able to achieve this through teamwork that includes airlines, regulators, air navigation service providers, airports, caterers, ground handlers and aircraft, engine and systems manufacturers," he said.

"As an industry, we make safety our top priority and work together to achieve it. But on very rare occasions tragedy strikes. And each time it does, it re-dedicates the whole industry to continue to improve," he added.

IATA represents some 240 airlines, comprising 84 per cent of global air traffic of which Malaysia Airlines is a member.

"We are saddened by this event, and our thoughts and prayers are with the family members and friends of all those involved," said Tyler.

"Like everyone, we hope that the aircraft will be located so that those with friends and loved ones on board MH370 flight can move beyond the current uncertainty. It will also allow us to transit from the current speculation into a full-scale investigation. The goal is to find out what happened and make sure that it does not happen again," he said.

"I should make clear IATA's role in this. We are not an investigator or regulator. And we are not a speculator. As the industry association, our role is to provide useful background and context where necessary.

"More importantly, once the authorities have determined the cause of this apparent tragedy, we will work with our members and other stakeholders to apply any lessons learned so as to help ensure that whatever may have happened to MH370 is not repeated," he added.

On the global outlook, Tyler said the airline industry is set to deliver a second year of improved profits. This is despite a slight downward revision to its industry outlook for 2014 of US$18.7 billion (RM61.7 billion) from the previous forecast of US$19.7 billion.

This revision is prompted by higher oil prices in the last three months which are now expected to average US$108 per barrel. This is US$3.50 per barrel more than previous projections. The US$3 billion added cost on the industry's fuel bill is expected to be largely offset by stronger demand, especially for cargo, which is being supported by a strengthening global economy.

Overall industry revenues are expected to rise to US$745 billion, which is US$2 billion more than previously projected.

Plantation stocks rally as palm oil futures hit RM2,901

KUALA LUMPUR: Share prices of mid-sized and small plantation companies leapt as palm oil futures on Bursa Malaysia Derivatives Market closed at a high of RM2,901 per tonne yesterday.

Heavyweight plantation counters like Sime Darby Bhd, IOI Corp Bhd, Felda Global Ventures Holdings Bhd, Kuala Lumpur Kepong Bhd (KLK) and Genting Plantations Bhd have started to climb and experienced profit-taking dips.

This week, pure upstream counters with young tree age profile are seen to be the main beneficiaries of the recovery in palm oil prices.

When contacted by Business Times, Maybank Investment Bank Bhd analyst Ong Chee Ting reiterated his view that crude palm oil (CPO) prices will remain relatively resilient due to biological tree stress and as the industry enters into seasonally lower production months from February to April.

Latest numbers from the Malaysian Palm Oil Board showed slowing production amid stable palm oil exports. Yesterday, the industry regulator said palm oil inventory fell to the lowest level since July 2013 amid low production season.

As at end-February 2014, the palm oil inventory settled at 1.66 million tonnes, much lower than market expectations of 1.8 million tonnes.

"We reckon that palm oil prices will stay relatively high at RM2,800 to RM2,900 per tonne over the next two months as the stockpile is tight," Ong said. "Nonetheless, it is possible for palm oil prices to breach RM3,000 per tonne in the near term if the present weather condition does not improve over the next three weeks," he added.

JF Apex Research, in its research note, said it is concerned that the prolonged dry spell in Malaysia could hurt CPO production in the mid-term. It maintained an "overweight" call on the plantation sector and its favourite counters include Genting Plantations, IJM Plantations Bhd and KLK.

Separately, RHB Investment Bank, in its notes to investors, noted the bullish tone of last week's Palm and Lauric Oils Conference & Exhibition: Price Outlook 2014 is further fuelling the current CPO price rally.

Most of speakers at the conference believed that there is still upside potential for palm oil prices, with projections of RM3,000 per tonne by mid-2014. Should El Nino occur, this may drive prices beyond RM3,000 per tonne.

RHB Investment Bank feel that prices are expected to average at around RM2,700 per tonne this year. "We maintain our 'overweight' stance on the sector. We are still at the early stage of a bull market as valuations are still inexpensive. Funds have only just started to flow into the palm oil sector," it said, adding that its top picks include IOI Corp and Jaya Tiasa Holdings Bhd.

Malaysia Airline Flight MH370 【MH370等你回家】管制雷达希望看...

A Malaysia Airlines flight carrying 227 passengers and 12 crew lost contact with air traffic controllers on Saturday en route from Kuala Lumpur to Beijing. The disappearance of a Malaysian jetliner is an "unprecedented aviation mystery" with a massive air and sea search now in its third day failing to find any confirmed trace of the plane or the 239 people aboard.

Flight MH370 was operated on a Boeing 777-200 aircraft. It departed Kuala Lumpur at 12.41 am on the 8th March 2014. The aircraft was scheduled to land at Beijing International Airport at 6.30am local Beijing time. Up until now, the authorities have yet to locate the missing aircraft. Let us spare a moment of our thoughts and pray for all on board MH370.

For business travelers who check in and out of Kuala Lumpur International Airport ever so frequently, flying will never be the same again.

Saving Women's Hearts with healthy palm oil

Yesterday was International Women's Day. In this short video clip, pharmacist Sherry Torkos, co-author of Saving Women's Hearts, stopped by the WLS studios in Washington DC to chat with news anchors about women's heart health.

For too long, Torkos said women have taken the “bikini approach” to their health, worrying about cancers of the breast and pelvic area. Yet heart disease is more deadly than all forms of cancer combined.

While these statistics are alarming, the good news is that there are simple steps that women can take to protect their hearts. Below are five ways to a healthier lifestyle that can save your heart.

1. Get another hour sleep. A recent Sleep in America poll reported that only half of women are getting adequate sleep (seven to eight hours). Lack of sleep can raise blood pressure, trigger inflammation, and promote atherosclerosis. Getting six hours of sleep or less per night has been found to increase women’s risk of heart disease, independent of other risk factors (such as smoking).

2. Cook with palm oil rather than olive oil. Olive oil is great to use in salad dressings or add to foods after it is cooked, but it is not heat stable and its beneficial properties are lost when it is heated to high temperatures. Palm oil is heat stable and contains potent antioxidants called tocotrienols that are good for the heart. Plus is it naturally free of trans fatty acids. Among famous brands containing heart healthy palm oil are Nutella, Carotino and some Smart Balance products.

3. Give yoga a try. Yoga is an effective way to reduce stress, improve sleep and lower blood pressure. Once you learn the techniques and poses, it is something that is free and easy to incorporate into even the busiest schedule.

4. Laugh more. Laughing relaxes and expands blood vessels, which helps protect the heart. Negative emotions such as anger, hostility, worry and pessimism are associated with increased risk of heart disease, whereas the opposite traits are protective.

5. Be optimistic. Research conducted in more than 97,000 women found that optimists have lower rates of heart disease. Stress is a major risk factor for heart disease, especially in women. Adopt strategies to better deal with stress such as deep breathing and meditation. Stay away from prescription tranquilisers as they only offer a bandage approach to stress, and are associated with numerous side effects and risks.

CPO may climb above RM3,000 a tonne

This is written by my colleagues Zaidi Isham Ismail and Lidiana Rosli.

KUALA LUMPUR:  Crude palm oil (CPO) prices may hit as high as RM3,500 a tonne by June if severe drought caused by a possible El Nino phenomenon parches crops in Southeast  Asia this year.

London-based Godrej International Ltd executive director Dorab E. Mistry said there could be two scenarios: El Nino envelops the region or the situation returns to normal with rainfall, which could see CPO prices hover between RM2,600  and RM2,900 a tonne between July and  October.

“Sabah had the lowest rainfall in 29 years and this could hurt palm oil production in late 2014,” Mistry told about  2,000 participants from more than  50 countries at the  25th Palm and Lauric Oils Conference and Exhibition POC2014 held here, yesterday.

Mistry said the heat wave is also possible in Brazil, unleashing a rally in everything from corn to coffee and sugar as dry weather threatens crops in the South American state, potentially stoking global food inflation. 

“This will kill all discretionary biodiesel global demand of 6.5 million tonnes. The dry weather must end in the next two weeks for if it doesn’t, then CPO prices can hit RM3,500. If the normal rainfall pattern returns, all forecasts of CPO production and price will have to be revised and there is a 30 per cent probability that it will fall to RM2,400 a tonne.”

  He said Indonesia’s biodiesel mandate is a “game changer” and will keep palm prices relatively high for a long time as Indonesia tweaks its biodiesel policy all the time. “Indonesia’s biodiesel mandate is 3.1 million tonnes of palm oil this year and could rise by an additional one million tonnes,” said Mistry.

  He said global cooking oil demand will probably increase by about 6.5 million tonnes in the 12 months from October 2013, while supplies are set to expand 6.8 million tonnes, adding that until July, world vegetable oil stocks, particularly palm oil, will remain very tight,” he said.

Mistry said Indonesia’s palm oil output is expected to hit 30.5 million tonnes in 2014 compared with 27.5 million tonnes last year, while Malaysian production is expected to hit 19.7 million tonnes from last year’s 19.5 million tonnes. 

 LMC International Ltd chairman Dr James Fry said CPO prices could reach US$1,030 (RM3,368) a tonne by middle of the year due to the current drought, which will cut Southeast Asia’s output in the third quarter. 

Rising biofuel mandates in countries such as Malaysia, Indonesia and Brazil will also add to the market tightness.

  “Fears about the future of the vegetable oil industry is one of the main drivers in pushing the prices, in either north or south direction and, thus, the pricing of vegetable oils will remain volatile in 2014. However, I’d like to warn against traders not to be too greedy with their CPO pricing as this would lead to importers potentially switching to other oils such as sunflower oil, soya bean oil and canola oil,” Fry said.  

In his presentation entitled “Biofuel Policies, Export Taxes and Competition Between Vegetable Oils: Lessons for 2014”, Fry said the current drought in Southeast Asia will continue to dictate the market to a certain extent.

  He said fears about the future are now driving prices.  “Despite large areas reaching maturity in Indonesia, the net effect of these factors is that it will be able to reduce stocks at a faster rate than normal by middle of the year."

 Indonesia and Malaysia are the world’s top two producers. Fry said the market today is anticipating sharper reduction in stocks than usual. He said Southeast Asian CPO  export taxes also had a far-reaching implications on the price structure of world palm oil products.

As CPO export tax rates are higher than refined palm oil, Indonesia achieved its initial objective encourage downstream investments, notably in cooking oil and oleochemicals. 

 ISTA Mielke GmbH Oil World executive director Thomas Mielke said all signs are indicating that crude palm oil (CPO) prices are expected to breach the US$1,000 (RM3,274)-a-tonne mark. He attributed his projection to unusually dry weather, a possible El Nino which can bring drought, and biodiesel mandates.

Malaysia’s CPO prices have been hovering  between RM2,200 and RM2,500 a tonne for the first 10 months of last year before it climbed to a higher bandwidth of RM2,500 and RM2,700 a tonne. Since this week, it spiked to break the RM2,800-tonne mark. 

Mielke said the current rally could see CPO prices scratch the US$1,000-a-tonne mark in the next four to eight weeks, provided the dry weather in the region persists. “If the rain falls in the coming weeks in Malaysia and Indonesia, I see limited upside in prices,” he said.

Mielke added that oil palm yields may suffer later in 2014 after unusual dryness in some planting areas  in Malaysia, Thailand  and Indonesian in the last two weeks. He said CPO prices may rise on concerns that stressed trees will produce less and exports could decline later in 2014, its first fall in 16 years.

  The Hamburg-based researcher said shipments are already slowing down due to lower output and this will support prices. “Bad weather could complicate an already  tight world supply scenario... it’s not El Nino yet and something is cooking up. A five per cent yield-loss in Southeast Asia equals to 2.7 million of palm oil, creating severe impacts on supplies and prices on all of the world’s 17 edible oils and fats,” Mielke said.

  He said palm oil production was boosted four times in the past 20 years — from 14 million tonnes in 1993 to 58 million tonnes in 2014 — of which Malaysia’s production will reach 19.6 million tonnes, while Indonesia’s will reach 30 million tonnes. He also said palm oil demand will always be strong as the world will need  80 million tonnes by 2020.

Bullish palm oil prospects

This is written by my colleague Zaidi Isham Ismail.

KUALA LUMPUR: This year can be bullish for crude palm oil,  depending on  government  policies on biodiesel,  severity of the prevailing dry weather and a possible El Nino  phenomenon.

 CPO prices breached the RM2,800-a-tonne mark on Monday after languishing between RM2,200 and RM2,500 for the first 10 months of last year.

London-based Godrej International director Dorab E. Mistry said CPO prices could have crashed to as low as RM1,700 last year but was saved to a certain extent by biodiesel. 

“For you to succeed in property, the three main strategies are location, location, location. Similarly last year, the reason CPO prices did not crash was biodiesel, biodiesel, biodiesel.

“This year, prices could be influenced by a possible El Nino and higher demand from Indonesia, which has become a major consumer like China and Europe,” Mistry told participants of the 25th Palm and Lauric Oils Conference and Exhibition: Price Outlook (POC 2014) here yesterday.

More than 2,000 delegates from more than 50 countries attended the three-day event, which was officiated by Deputy Prime Minister Tan Sri Muhyiddin Yassin. The POC 2014 is organised by Bursa Malaysia and CME Group.

Malaysian Palm Oil Council chief executive officer Tan Sri Dr Yusof Basiron said the dry weather could dictate the way CPO prices are headed in the next 24 months."Palm oil trees’ female flowers can change into male flowers and this could lower fresh fruit bunches production. It’s anybody’s guess where CPO prices will head in the next 24 months ... but right now, the dry weather is having an effect on the prices."

On another matter, Yusof said the long-awaited Malaysian Sustainable Palm Oil is in the final stage of approval at the government level. “What’s important is that the producers and consumers are accepting it like the other certification standards and we have to look at all the entry points to ensure that it can go the distance,” said Yusof.

Meanwhile, Indonesian Palm Oil Association executive director Fadhil Hasan said oleochemical demand is rising in Europe  for the production of  products such as cosmetics and detergents. This could lend support to CPO prices in the coming months. “Even Boeing is carrying out experiments to use biodiesel as jet  fuel. CPO prices will also be determined by how Malaysia and Indonesia set their policies on biodiesel,” he said.

Palm oil industry has chartered new frontiers

This is written by my colleague Zulita Mustafa.

KUALA LUMPUR: Deputy Prime Minister Tan Sri Muhyiddin Yassin yesterday said the palm oil industry in Malaysia has chartered new frontiers by ensuring adequate supply of palm oil to meet the growing global demand for this versatile oil.

He added that while this being the case, the county cannot remain complacent with current palm oil prices hovering around RM2,800 per tonne.

Muhyiddin said the industry should expand its venture into diversified niche downstream activities, which will fetch higher market values for palm products. 

"In order to maintain our competitiveness in the global market, there is a need to address major issues such as environmental protection, sustainable production and trade liberalisation.

"With rising competition, it has become a matter of strategic importance for the industry to examine the relative strengths of Malaysian palm oil and challenges heaped upon them," he said in his speech at the opening of Palm and Lauric Oils Conference and Exhibition Price Outlook 2014 here yesterday.

Muhyiddin also said the government has placed importance in creating wealth through production of advanced oleo chemical products, biomass, biodiesel, specialty fats and phytonutrients. The government, he said would also like industry players to undertake greater commitment and intensity efforts in research and development activities to enhance productivity in the oil palm sector.

The three-day event sees more than 2,000 industry players from over 50 countries attending the conference. Also present were Plantation Industries and Commodities Datuk Amar Douglas Uggah Embas and Bursa Malaysia chief executive officer Datuk Tajuddin Atan.