Monday, 14 April 2008

Malaysia's 2008 palm oil exports heading for record: report

Malaysia's 2008 palm oil exports heading for record: report

KUALA LUMPUR (AFP) — Malaysia's palm oil exports are headed for a record 50 billion ringgit (15.7 billion dollars) in 2008, boosted by strong global demand, a report said on Tuesday. Malaysian Palm Oil Board chairman Sabri Ahmad said continued tight supply and high demand for vegetable oils, as well as bad weather conditions, could see the commodity's bull run continue into 2009.

"We expect the world demand for vegetable oils and fats to increase within the next three to four years," he said according to The Star.

Malaysia, the world's top palm oil producer, saw export revenue jump 42 percent to 45.1 billion ringgit in 2007 compared with 31.8 billion ringgit in 2006, the daily said.

China is the largest buyer of Malaysian palm oil, accounting for about 28 percent of palm oil exports.

"China and India are expected to take the lead in demand for palm oil due to mushrooming domestic industries and increasing consumption," Sabri told the state Bernama news agency.
Sabri said the industry achieved a "phenomenal" performance in 2007, with the average price of crude palm oil at 2,530.50 ringgit per tonne against 1,510.50 ringgit the previous year, up by 67.5 percent.

Palm oil exports are becoming an important source of growth for Malaysia as the manufacturing sector experiences a sharp slowdown due to weaker demand from the United States.

Malaysia and Indonesia are the two leading producers of palm oil, which is typically used for cooking and soap-making, but also increasingly for producing biodiesel.

Neighbouring Indonesia had said it plans to rise from second place to become the largest palm oil producer by 2008. Malaysia and Indonesia together account for 85 percent of world production.