POINTERS: Malaysia's Palm Oil Supply and Demand Updates for 2nd half 2019

Datuk Dr. Ahmad Parveez Hj. Ghulam Kadir

Datuk Dr. Ahmad Parveez is currently the Director General of Malaysian Palm Oil Board (MPOB). He was appointed as Fellow of Academy Science Malaysia in 2016 and Member of National Biosafety Board (2018 – 2022). In July 2021, he was appointed as a Member of the Science Council of Malaysian Agricultural Research & Development Institute (MARDI). He sits on various other Boards; Board of Trustee of Malaysian Palm Oil Council (MPOC, 2019 -2022), Board of Trustee of Malaysian Palm Oil Certification Council (MPOCC, 2019 - 2023) and Board of Trustee of Institute of Malaysian Plantation and Commodities (IMPAC). Datuk Dr. Ahmad Parveez was previously the Chairman of Genetic Modification Advisory Committee under the National Biosafety Board (GMAC, 2010 – 2018). Recently, Datuk Dr. Ahmad Parveez was appointed as an Adjunct Professor in the Department of Biological and Agricultural Engineering, Faculty of Engineering, University Putra Malaysia (UPM). He is also very active in various professional societies including as the President of International Society for Oil Palm Breeders (ISOPB), Chairperson for the Asian Section of American Oil Chemists’ Society (AOCS) and Board Member of The International Society of Biocatalysis and Agricultural Biotechnology (ISBAB).

Datuk Dr. Ahmad Parveez was born in Taiping, Perak and obtained his secondary education at Sekolah Menengah King Edward VII, Taiping. He graduated with Bachelor of Science (UKM) in Genetics, Master of Science (UKM) in Molecular Genetics and a PhD (UPM) in Plant Genetic Engineering. He has 32 years of experience in Plant Molecular Biology, Genetic Engineering and Biosafety. He developed world first transgenic oil palm in 1997. His interest is in genetic modification of oil palm, biosafety of living modified organisms and oil palm sustainability.

He has obtained a number of prestigious awards both locally and internationally. He has 17 patents filed and six of them have been granted. He has authored and co-authored almost 100 papers in refereed journals and more than 250 conference papers.

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		Mr. N. Balu CAREER HISTORY: • 33 years of experience in the palm oil industry – in the area of Market Intelligence/Research, Market Promotion & Market Development; Designing and Executing Counter-Trade / Offset Deals and Palm Oil Credit Payments Arrangement (POCPA) • Malaysian Trade Negotiator for Bilateral, Regional, Plurilateral and Multilateral FTAs & WTO Trade Negotiations (Focussing on Commodities) : Trade in Goods/Market Access, Rules of Origin and Trade Facilitation. • Former Newspaper Editor with the New Straits Times (in charge of Beriteks) • Former Economics Research Officer with the Consumer Association of Penang (CAP) • Chairman of Global Economics and Marketing Conference, PIPOC 2015 & 2017 • Chairman of Palm Oil Economic Review & Outlook Seminar, 2016 & 2017 • Chairman of Palm Industry Labour: Issues, Performance & Sustainability (PILIPS), 2016 • Chairman of Roundtable on Oils & Fats Global Situation, Palm Oil Familiarization Programme, POFP 2016 • Presenter of Seminar Papers at International Conferences EDUCATION & PROFESSIONAL QUALIFICATIONS: • Certificate in Middle Management, CBI, Rotterdam, Holland. • Bachelor of Social Science (Hons in Economics & Management), USM, Penang. • Graduate Diploma with Distinction (Business Studies), RMIT University, Melbourne, Australia. • Master in Business Management (International Marketing), RMIT University, Melbourne, Australia. • Certified Practising Marketer (CPM), AMI, Australia. • Fellow of the Australian Marketing Institute, Australia. • Management Representative (Services) and Lead Internal Auditor for ISO 9001:2008, MPOB MEMBERSHIP: • Malaysian National Shipping Council (MNSC Treasurer) • Committee Member for Commodities Customs Classification, Royal Malaysian Customs Department. VIEW PROFILE

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Questions & Answers (13) :

nur izzati

4 years ago

Explain the impact of this issues towards Malaysian Exports and Trade Balance in Balance Of Payment account on 2019? The issues about discriminatory trade barriers by the European Union. hope you can answer this asap

Tey Poh Leng

5 years ago

i) What are the catalysts for Palm Oil prices to go up to MYR 2500-2600/MT level for 2nd half of 2019? ii) Any likelihood of El-Nino to be returned again for coming months?

Balu A/L Nambiappan:
i) There are two (2) catalysts for CPO prices to go up to RM2,500 – RM2,600/tonne for 2nd half of 2019. Firstly, when palm oil stock is projected to decline below 2.3 million tonnes due to strong palm oil export demand from major importing countries. Secondly, tracking firmer soyabean oil prices in the world market (above US$800/tonne). ii) According to World Meteorological Organization, chances for a strong El-Niño event to appear during second half of 2019 is unlikely. However, the collective model forecasts indicate that at least weak El-Niño lasting through 2019. Generally, the impact of weak El-Niño is insignificant to the country excepts in Sabah, which is situated close to the Pacific Ocean where the El-Niño develops owing to the warming of the ocean.
5 years ago

HCLeow

5 years ago

How much PME consume locally in 1H19? How is the progress of B7 for industry blending, which suppose to take effect on 1 Jul 2019?

Balu A/L Nambiappan:
The consumption of PME for local B10 programme for the transport sector during the 1st Half of 2019 is estimated at 267,000 tonnes. Meanwhile, the B7 programme for industrial sector took effect starting July 2019. Thus far, the B7 programme is progressing well and there is No Complaints received by MPI and MPOB pertaining to the technical issues
5 years ago

HCLeow

5 years ago

1) How much reduction in fertiliser in term of percentage you reckon for 2019? Is this scenario happen only in 2019? 2) Given that soft loan is offer for replanting now, is MPOB seeing more application for replanting? what is MPOB estimate for replanting in 2019? Thank you.

Anthony Yap

5 years ago

a) Please advise the forecast export numbers of Palm Methyl Ester (PME) from Malaysia on 2nd half 2019. b) Since Malaysia implemented B10; any significant draw down on our Palm Oils Stocks? c) Indonesia next year is pushing to implement B30 PME; what is Malaysia next plan on PME usage?

Balu A/L Nambiappan:
(a) Based on MPOB data, exports of Malaysian palm methyl ester biodiesel during in Jan-July 2019 increased by 35.4% to 366,993 tonnes from 270,954 tonnes during the same period in 2018, mainly attributed to higher demand from China and the EU. However, we are unable to provide forecast export figures for PME. (b) The B10 mandated programme for the transport sector beginning Feb 2019 is likely to contribute to a draw-down in palm oil stocks. The utilisation of 534,000 tonnes of palm oil per year for B10 programme is expected to lower the palm oil stock level. (c) The Government is looking forward in implementing the B20 programme for the transport sector in 2020, as announced by YAB PM in December 2018. The combination of B20 programme (transport sector) if implemented, and B7 programme (industrial sector) would reduce approximately 1.3 million tonnes of palm oil from the present stock level.
5 years ago

YAP YAU KOONG

5 years ago

It is heartening to note that 2019 recorded better OER compared to 2018. What are the possible contributing factors to the improved OER?

Balu A/L Nambiappan:
Malaysia’s OER performance during Jan-July 2019 was higher by 1.0% to reach 20.06 percent as against 19.86 percent during Jan-July 2018 mainly due to higher quality of FFB processed by PO mills arising from favourable weather conditions in almost all States.
5 years ago

YAP YAU KOONG

5 years ago

Our Minister of Primary Industry is doing a great job in promoting Palm Oil to Malaysia as well as to the world. With the mandatory implementation of MSPO, will our Malaysia palm oil fetch a premium in the international market?

Balu A/L Nambiappan:
The Malaysian Sustainable Palm Oil (MSPO) Certification Scheme is the national scheme in Malaysia for oil palm plantations, independent and organised smallholdings, and palm oil processing facilities (supply chain) to be certified in line with the requirements of the MSPO Standards. Right now there is no evidence that MSPO certified palm oil is given a premium price in the domestic and International markets. This is because there is now no MSPO palm oil contracts registered with MPOB. We are nevertheless hopeful that in the future, palm oil contracts under MSPO can get a premium price both in the domestic and international markets similar to what RSPO palm products are given.
5 years ago

MOHD RAFIZAN BIN SAMIAN

5 years ago

Do you think the implementation of MSPO Certification to all planters has any effect to the increase of palm oil production in 2019 when compared to 2018?

Balu A/L Nambiappan:
The MSPO Certification aims to provide the planters with general principles on the requirements to establish, maintain and improve their operational practices which enables the adoption of a systematic and integrated approach towards attaining sustainable production of palm oil. A key principle in the MSPO standard is the adoption of best practices. In the case of the independent smallholders, it is the implementation of the MPOB Codes of Practice and the Kod Amalan Baik Pekebun Kecil, whereas for the plantations and organized smallholders, the requirements for best practices include the establishment of a long-term management planning on FFB yield trend, site yield potential and age profile. All these elements would influence and can positively contribute to the increase in FFB yield and palm oil production. A study by MPOB has also shown that the FFB yield after MSPO certification by the independent smallholders increased by 19% as compared to before MSPO certification. However, there are various factors affecting FFB yield performance which include the age profile of the oil palm trees, fertilizer application and rainfall.
5 years ago

MOHD RAFIZAN BIN SAMIAN

5 years ago

Is there any explanation on the downtrend of palm oil import from Pakistan and Others (Slide No 11)?

Balu A/L Nambiappan:
Exports of Malaysian palm oil to Pakistan declined during Jan-July 2019 due to higher imports of soyabean oil by 64.0% to 123,000 tonnes in Oct/July 2018/2019 compared to 75,000 tonnes in October/July 2017/2018. Higher import of Indonesian palm oil is another contributing factor. For the record, exports of Indonesian palm oil during Jan-Apr 2019 was increased by 5.2% to 694,000 tonnes compared to 660,000 tonnes in the corresponding period of 2018.
5 years ago

Mohd Feroize

5 years ago

US-Iran conflict in the straits of Hormuz since May has cause trade disruption in the Middle-East. Insurance premium paid for goods delivered to the area is high. How is the situation there now? Any updates. In terms of palm oil trade, which countries in the Middle East are affected significantly.

Balu A/L Nambiappan:
Previously, during the Gulf war in 1991, there was increased conflicts/tensions in the Hormuz Strait. Of late, amidst the wake of a US strike in June 2017, claiming that the Iranian military training at the Hormuz Straits had caused 'disruption' to US military vessels located in that area. Tensions escalated further as the US withdrew from the nuclear agreement (JCPOA) in May 2018. Subsequently, shipping costs and insurance premiums to the Gulf region especially to Iran began when the US unilaterally imposed a sanction on Iran on 24 June 2018. A full economic sanction was imposed on Iran in November 2018. Since then, international shipping companies such as Maersk and MSC have suspended their operations at all ports in Iran and international insurance companies have also stopped providing insurance coverage for vessels operating in Iran. This has further resulted in great difficulties to Iran, as the main country involved in the ongoing US-Iran conflict. Tensions are still continuing in the Strait of Hormuz, and this will persist until the US unilateral sanctions on Iran comes to an end.

Nevertheless, most Iranian companies buy large quantities of palm oil (through third countries) to replenish their stocks as a precautionary measure over the conflict. Meanwhile, palm oil intake by other countries in the Gulf Region, namely UAE, Kuwait, Qatar and Bahrain have shown increases. Imports of Malaysian palm oil products by Saudi Arabia, Oman and Iraq have declined due to domestic factors and is not related to tensions prevailing in the Hormuz Straits.

5 years ago

Yazid Mustafa

5 years ago

Why is Sarawak’s FFB productivity so low at 6.76 T/Ha compared to 9.19 T/H and 9.01 T/Ha for Peninsula and Sabah for 1st Half 2019?

Balu A/L Nambiappan:
Based on our historical data, we found that it is normal for Sarawak’s FFB yield to be lower than that of Peninsular Malaysia and Sabah. The same situation was also recorded for the corresponding period of the previous year. This is mainly due to higher proportion of newly matured area in Sarawak. For the record, as of June 2019, the newly matured area in Sarawak covers 42.1% from the total matured area, compared to 28.7% and 27.1% for Peninsular Malaysia and Sabah respectively.
5 years ago

Candy Lee

5 years ago

What is the projection for Malaysia palm oil export to India for 2018/2019?

Balu A/L Nambiappan:
According to MPOB data, for the period Jan-July 2019, exports of Malaysian palm oil to India increased significantly by 99.9% to 3.04 million tonnes. This was due to lower import duty for processed palm oil under MICECA agreement. The upward trend pattern is expected to continue for the remaining of the year. However, we could not share the projection figure for 2019 to the public as it is beyond our normal practice.
5 years ago

Roby Fauzan

5 years ago

Are there any agronomic reasons why 2H 2019 production is less than 52% of total annual 2019 estimate?

Balu A/L Nambiappan:
Production for the 2nd Half 2019 is expected to be less than 52% of total annual 2019 estimate mainly due to the effect of less fertilizer application during the 1st Half 2019 arising from lower palm oil price. In addition, the oil palm replanting incentive (soft loan) announced by the Government recently is expected to increase the replanting activity during the 2nd Half 2019, thus the CPO production is expected to further decline from the normal trend.
5 years ago