CPO to trade between RM2,700 and RM2,800 this year
KUALA LUMPUR: The Plantation Industries and Commodities Ministry expects crude palm oil (CPO) prices to average between RM2,700 and RM2,800 per tonne this year.
In 2016, the average price was RM2,600 per tonne.
Its minister, Datuk Seri Mah Siew Keong, said the expected higher prices was driven by efforts and initiatives of the government, including venturing into various markets, especially India and Iran.
“We are going to work harder to diversify the markets. By next month, we will go to India, and hope to sign the free trade agreement with Iran to boost palm oil exports,” he told reporters at the Reach and Remind Friends of the Industry Seminar 2017 and Dialogue yesterday.
He said the other potential markets the government would look into included West Asia, South America and non-European Union countries.
“On CPO production, we expect it will be higher this year compared to 2016 due to the allocation of RM30 million grants for smallholders to undertake replanting as well as planting of new oil palm under Budget 2017,” he said.
“The smallholders are eligible to apply for the replanting grant of RM7,500 per ha,” he said.
Mah said with the replanting initiatives, the ministry hopes to achieve an oil extraction rate from the current 20% to 23% by 2020.
CPO production between January and November last year fell to 15.8 million tonnes due to the El Nino dry weather phenomenon, he said.
“Since palm oil is the largest contributor to the agriculture gross domestic product, we must come up with more innovations,” he said. – Bernama