https://opiej.mpob.gov.my Oil Palm Industry Economic Journal Tue, 28 Aug 2018 06:46:34 +0000 en-US hourly 1 https://wordpress.org/?v=7.0 https://opiej.mpob.gov.my/lessons-learned-from-sustaining-remunerative-palm-oil-prices-the-malaysian-experience/ Tue, 28 Aug 2018 06:46:34 +0000 https://opiej.mpob.gov.my/?p=265 Read more]]> The volatility of the crude palm oil (CPO) prices over the increasing long-term trend in the past has created instability in the earnings for the country and the returns for the industry. The volatility has been caused by the fundamentals – supply and demand factors. Despite this fact, it is important for us to sustain palm oil price at high levels in order to have good returns. It was observed that prior to sustaining high prices, the market was usually bearish with high stock levels. Strategic measures are required to ensure that palm oil stocks are well managed. In this regard, certain measures are undertaken under the stock management programme by the government, including CPO burning as biofuel for power generation, biodiesel usage in the country (called Bx) and replanting programmes which are generally aimed at reducing the stock level in the country. The swift proactive action undertaken by the government should be lauded as it does provide some respite to the palm oil industry with prices firming up and sustained at high levels.

]]> https://opiej.mpob.gov.my/world-biodiesel-viability-amidst-high-feedstock-prices/ Tue, 28 Aug 2018 05:29:44 +0000 https://opiej.mpob.gov.my/?p=234 Read more]]> Conventional economics says the price of crude palm oil (CPO) has an inverse relationship with stock. In the past two years, however, the economics of world oils and fats had changed, resulting in both prices and stocks rising in tandem, thus defying traditional economic theory. There are now strong signs of a linkage between the fuel price and the CPO price, which is created by the new role played by biodiesel. The article suggests that, when analysing the palm oil price, one now has to take into account of two factors, namely the petroleum price and the level of oil stocks. The petroleum price determines the price band within which palm oil will trade, while the stock level determines how high or low palm oil prices will lie within the trading range.

]]>