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Crude palm oil production to reach 20 million tonnes in 2015

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Staff writer ▼ | January 3, 2015
Crude palm oil
Malaysia   The Rubber Production Incentive

Crude palm oil (CPO) production is expected to reach 20 million tonnes in 2015 from the estimated 19.5 million tonnes in 2014, Malaysia's Plantation Industries and Commodities Minister Amar Douglas Uggah Embas said.

Uggah said production in 2014 was hampered by the floods whereby a total of 7,500 smallholders covering 24,000 ha and 230 oil palm estates spanning 160,000ha were affected.

“The Malaysian Palm Oil Board (MPOB) is looking at minimising the impact of the floods on smallholders. However, we still cannot reveal our plans as we are still working it out with the Government,” he said at a press conference on the Rubber Production Incentive (IPG).

For December 2014, CPO production is expected to drop by between 15% and 20% to 1.4 million tonnes from 1.75 million tonnes recorded in November. Stockpile is expected to ease to two million tonnes from 2.7 million tonnes last month.

Uggah said the country’s stockpile would likely continue to decline, going forward, as the Government implemented the Biodiesel B7 programme (blending of 7% palm biodiesel with 93% petroleum diesel) on full throttle throughout the country this month.

“So far, we have only started implementing the B7 programme in some parts of the country. We are also looking forward to implement the B10 programme,” he said.

Meanwhile, MPOB director-general Datuk Dr Choo Yuen May said he expected a slight decline in exports revenue this year to RM60bil from RM63bil in 2013.

On rubber, Uggah projected production to reach 700,000 tonnes in 2015, with January production estimated to ease at around 30,000 tonnes due to heavy rainfall. He said while it was a challenging time for natural rubber, production would likely pick up in the middle of 2015.

On the IPG, to be carried out this month, the mechanism is designed to assist the smallholders during the decline in rubber prices.

“The programme will be activated when the SMR20 is at or below RM4.60 per kg and cuplumps at or below RM1.75 per kg,” Uggah said.

Once activated, the Government will pay 30 sen per kg for cuplumps (50% dry rubber content or DRC), a maximum of 90 sen per kg for latex based on DRC and a maximum of 60 sen per kg for unsmoked sheets rubber based on DRC.

“In order to claim, the smallholders must provide an invoice for the rubber which had been sold and possess the Rubber Transaction Authority Permit (PAT-G) cards. So far, we have issued 124,000 PAT-G cards. To the smallholders who have not yet applied, we advise them to do so within the next two weeks,” he added.

On assisting smallholders affected by the floods, he said the Government was looking at replacing their rubber tapping equipments as one of the relief measures.

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