Malaysian
Day - 31st August, 2006
Financial Times - Interview of MPOC CEO.
TOWARDS FAIR TRADE
MPOC plays a key role in the global palm oil industry
Malaysia today is the world leader in palm oil production and innovation.
"Malaysian palm oil alone accounts for 27 per cent of the world production
of edible oils and fats and 58 per cent of the global palm oil export
market," articulates Tan Sri Datuk Dr. Yusof Basiron, CEO, Malaysian
Palm Oil Council (MPOC). He predicts that with the current and projected
high prices for petroleum, and the inherently high quality and productivity
of Malaysian palm oil, the MPOC is almost assured of a key role in the
global biofuel trade.
As
industry legend has it, Dr. Yusof has been credited as the person most
responsible for making palm oil one of the two central pillars of the
Malaysian economy, along with petroleum.
Global
Outlook
The
price of crude oil has now hit a record high of nearly $75.5 a barrel
in international markets and it might reach $100 in the future as earlier
predicted by market analysts.
This
has forced consumers, especially those in European countries, to make
efforts for depending more on bio-diesel than before. Bio-diesel is
produced from palm and soybean oils as an alternative. Malaysia has
been constantly on the move to improve it's existing line of new products
like bio-diesel. Malaysia's biodiesel industry is starting to expand
after many years of research in developing technology and improving
its viability on a commercial scale. The first 2000 tonnes has already
been shipped to Europe in early August, this year.
Oil palm is mainly grown in Malaysia and Indonesia. Palm bio-diesel
is fast becoming a viable and attractive alternative to petroleum as
it is the most efficient energy crop. Unlike seasonal crops, oil palm,
a perennial crop, ensures a steady and consistent supply.
Furthermore, the oil palm is well known to have high yields, an average
of 3.5 to 5 tonnes of oil per hectare annually, which makes it the most
effective of oil crops.
Malaysia, the largest palm producing country, has raised the oil palm
plantation area to almost 4 million hectares over the course of last
35 years. The palm oil industry is contributing significantly to the
world population in terms of food, raw material for the oleochemical
industry and also in terms of energy with increasing interest in bio-diesel.
All these are derived from a well managed plantation industry that is
highly sustainable.
The Indian Connection
Although India produces its own palm oil, it still imports the bulk
of its requirements and at least 70 percent or 3.7 million tonnes of
its edible oil comes from Malaysia and Indonesia. India expects to triple
its palm oil imports to about 10 million tonnes by 2012 to fuel its
rapidly growing economy. However, of late, India has shifted to Indonesia
for meeting all of it's palm oil demands. Duty on processed palm oil
has been increased which acts as a deterrent for imports from Malaysia.
However, earlier this year, India moved towards lowering the base import
prices of the commodity. Indonesia now supplies about 70 per cent of
India's demand of crude palm oil while the balance is imported from
Malaysia.
In the year 2005, China retained it's position as the biggest importer
of palm oil, followed by EU and Pakistan. Along with USA, Egypt and
India, they took up 60% of the export volume. China imported 2.96 million
tonnes of Malaysian palm oil, an increase of 5.7% from 2004.
Parting Shot
As Dr. Yusof puts it, "Although India has been a tough market MPOC will
not ease their efforts to work towards successful bilateral trade with
India. After all, both countries have long enjoyed a good business relationship
and it will only be a matter of time before this is also extended to
the Malaysian palm oil trade."
