Business Times Palm oil exports strong despite global slowdown

Malayasia’s palm oil exports are still strong despite the global economic slowdown, led by the good appetite of countries like China and India.

Malaysian Palm Oil Association (MPOA) chairman Datuk Azhar Abdul Hamid said so far the impact of the downturn is minimal.

"Although the export trend varies up and down from month to month, demand is still stable," Azhar told reporters in Putrajaya at the launch of the association's new book on sustainable production of palm oil.

The book was launched by Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui.

Azhar, who is also Sime Darby Plantations Sdn Bhd managing director, said despite predictions of a lower crude palm oil price, it has been firm due to a healthy demand and supply situation in the world market.

Malaysia is the world's second largest oil palm churner after Indonesia, exporting over 22 million tonnes and its value added products were worth over RM65 billion in 2008.

Meanwhile, Chin said replanting efforts have partly helped stabilise CPO price at around RM2,100 a tonne now.

The government has approved 1,228 applications from big firms and smalholders to replant a total area of 106,330ha nationwide.

This is more than half of the government's target to replant 200,000ha over the next two years. Malaysia now has 4.3 million hectares of oil palm plantations.

As incentive, the government, under the second stimulus package, has allocated RM200 million or RM1,000 per hectare for companies and RM6,000 per hectare for smallholders.

"The government will pay a total of RM106.3 million, or RM1,000 per hectare, to replant trees of 25 years and above.

Due to replanting, the national stockpile has also dipped to 1.5 million tonnes as at end-March from 2.2 million tonnes in November last year.