https://opiej.mpob.gov.my Oil Palm Industry Economic Journal Tue, 28 Aug 2018 05:18:57 +0000 en-US hourly 1 https://wordpress.org/?v=7.0 https://opiej.mpob.gov.my/a-study-on-the-relationship-between-the-futures-and-physical-prices-of-palm-oil/ Tue, 28 Aug 2018 05:18:57 +0000 https://opiej.mpob.gov.my/?p=220 Read more]]> The difference between cash and futures prices is known as basis. It represents the local demand and supply situation as well as the risk factors associated with the physical commodity trade. Forecast basis can be used with the futures prices to predict the cash price of palm oil. In addition, using the expected trends in basis can improve hedging by both buyers and sellers. Forecasts for other crops using basis from simple historical averages compare favourably with the results from more complex forecasting models. This work investigated the behaviour of crude palm oil (CPO) basis and compared practical methods of forecasting CPO basis by regions in Malaysia using multi-year historical averages.

]]> https://opiej.mpob.gov.my/production-and-price-forecast-for-malaysian-palm-oil/ Tue, 28 Aug 2018 05:03:37 +0000 https://opiej.mpob.gov.my/?p=204 Read more]]> In the oils and fats sector, Malaysia can always be associated with palm oil due to its being the world’s biggest producer and exporter of the commodity. Malaysia produces and exports most of its palm oil due to its small population size and receives quite substantial amount of revenues from this product to support its economy. Thus, in this respect, it is important for the country to monitor the commodity’s production as well as its price that can be used in a way to determine the country’s revenue or in various decision-making processes. It is the objective of this paper then to analyse them econometrically and finally to forecast them. The paper indicates that production of palm oil will increase at a decreasing rate in future due to limited availability of land. By 2020, production is expected to reach 22 million tonnes while in the short term, it will be about 15.9 million tonnes in 2006. Price of palm oil is expected to fluctuate as before but in the near future, strengthening its level by increasing gradually in 2006.

]]> https://opiej.mpob.gov.my/palm-kernel-cake-marketing-constraints-and-prospects/ Tue, 28 Aug 2018 04:53:55 +0000 https://opiej.mpob.gov.my/?p=193 Read more]]> Standardization or product specification is an important measure to ensure that only high quality product reaches the market place. The formation of palm kernel cake (PKC) trade specifications and the requirements of quality testing plus regular inspections had assured the quality of PKC was under control throughout the years. The changing preferences by customers and the advancement of technology validate the revision of such specifications. The study reviews the quality performance of PKC within its trade specifications in the previous years and the possibility of improving its quality to a higher level. Moreover, it reveals the economic significance of elevating the quality of PKC through innovative processing system that produces its raw materials i.e. palm kernel.

]]> https://opiej.mpob.gov.my/vision-2020-the-palm-oil-phenomenon/ Tue, 28 Aug 2018 04:49:09 +0000 https://opiej.mpob.gov.my/?p=187 Read more]]> Predicting the future performance of an export oriented commodity like palm oil is no easy task. The prediction has to take into account the long run past performance, resource constraints and challenges faced by the commodity at both the domestic and international fronts. This paper attempts to overview the palm oil industry; what it was in the past, its situation today and its likely development in the future.

]]> https://opiej.mpob.gov.my/market-potential-and-challenges-for-the-malaysian-palm-oil-industry-in-facing-competition-from-other-vegetable-oils/ Tue, 28 Aug 2018 04:40:37 +0000 https://opiej.mpob.gov.my/?p=178 Read more]]> The market potential for oils and fats remains good into the future considering the increases in population, income as well as per capita consumption especially in countries with currently low income and low consumption. However, the challenges are that most of the oils are inter-substitutable and therefore in competition with each other. Thus, countries impose support measures to gain markets for their products. This paper examines the market potential and challenges of the Malaysian palm oil industry in facing competition from other vegetable oils. There exists a relationship between vegetable oil prices in the longterm and short-term because they are co-integrated. The vector error correction model (VECM) was used to distinguish the long- and shortterm relationships between the vegetable oil price variables. This test determined the oils in close competition with one another as well as established the bi-directional causality between the oils. The former means that two or more oils can influence each other. In general, it was concluded that palm olein is a price leader to certain vegetable oils and the challenge lies in making it the main price leader in the vegetable oils and fats sector. This can be achieved by palm oil producing and exporting countries having their own market intelligence to confer an advantage in preparing better competing strategies.

]]> https://opiej.mpob.gov.my/the-role-of-research-and-development-strategies-in-food-safety-and-good-agricultural-manufacturing-and-distribution-practices-in-the-malaysian-palm-oil-industry/ Tue, 28 Aug 2018 04:38:58 +0000 https://opiej.mpob.gov.my/?p=176 Read more]]> Globalization has expanded the Malaysian palm oil export market to over 140 countries. Research and development strategies carried out by Malaysian Palm Oil Board (MPOB) continue to provide information to demonstrate proactively food safety with negligible risk in its global supply chains. By examining the factors of air, water, soil, agricultural input, raw material and human used in the production, processing and manufacturing operations, the sound knowledge of science and technology from the 209 MPOB innovations, when combined with business and application of the widely accepted rigorous and systematic method of assessing and controlling hazards through the food chain, has ensured that palm oil remains an agricultural product that is healthy and safe to the customer. Throughout the food supply chain, the general principles of hazard analysis by critical control points (HACCP) have been incorporated into food safety legislation, long before they were officially introduced, to check the hygiene requirement and to use as a practical means of standardizing international food quality control and assurance practices. Every stage of preparation, processing, transport and distribution of palm oil is examined so that the final palm oil products for retailing to customers indeed are safe and nutritious. An effort is made to communicate new R&D findings to retain the credibility and trust of customers who will understand what lies behind such a food safety assurance scheme. The value-add throughout the supply chain covers good agricultural practices (GAP), good manufacturing practices (GMP) and good distribution practices (GDP). Built into a database, the information gathered allows the effectiveness of the good practices in food safety management, detection of contaminants, toxicology, novel processing, packaging and application of risk management to be evaluated. The harmonization of these good practices towards standardization provides a high level of confidence to the operational entities and the customers. The auditors and assessors when benchmarked by accredited bodies that are internationally recognized, the industry will attain integrity by their assessment. Knowledge that Malaysian palm oil products are produced to an agreed standard will further boost consumer confidence by making them even more acceptable by people the world over.

]]> https://opiej.mpob.gov.my/palm-oil-the-driving-force-of-world-oils-and-fats-economy/ Tue, 28 Aug 2018 01:35:17 +0000 https://opiej.mpob.gov.my/?p=157 Read more]]> Palm oil accounts for 21% and 47% of the global oil and fats production and trade respectively. Both Malaysia and Indonesia together are the world’s largest producers and exporters of palm oil with 84% and 90% share of world palm oil production and export, respectively. The paper outlines the increasingly dominant role that palm oil has played in the world oils and fats supply and demand equation during the past 40 years. The ascent of palm oil as a powerhouse in the global oils and fats market has been achieved by leveraging upon the techno-economic advantages of palm oil vis-à-vis competing oils as well as positive developments arising from consumer concerns on health, environment and food security. In efforts to maintain continued market growth, the future direction of the industry relating to improving competitiveness, widening the uses of palm oil, eliminating trade barriers and exploring new innovative marketing approaches will be discussed. These positive developments augur well for palm oil in its role as the driving force of the world oils and fats economy.

]]> https://opiej.mpob.gov.my/us-agricultural-subsidies-and-their-implications-on-oilseeds-and-oils-and-fats-trade/ Mon, 27 Aug 2018 08:32:52 +0000 http://palmoilis.mpob.gov.my/prototype/opiej/?p=113 Read more]]> Palm oil is today the leading edible oil traded in the world market, accounting for more than 40% of the total export trade of 17 oils and fats. Although oil palm is widely recognized as the highest yielding oil crop, this does not in any way guarantee that it is the most cost competitive. The reality is that trade distorting measures in the form of agricultural production subsidies and export assistance programmes continue to challenge the competitiveness of palm oil and subsequently, its position as the most competitive vegetable oil. In highlighting the implications of trade distorting agricultural subsidies, it is clear that farmers planting decisions in the US are related to the attractive loan rate rather than the market price, thus introducing potential production-influencing effects into the market place

]]> https://opiej.mpob.gov.my/arbitration-issues-in-the-international-vegetable-oil-trade/ Mon, 27 Aug 2018 08:31:17 +0000 http://palmoilis.mpob.gov.my/prototype/opiej/?p=111 This paper concerns settling commercial disputes in the oils and fats trade. The usual method is litigation before the courts and commercial settlements. However, between these two extremes are arbitration, coordination and mediations. The FOSFA system of arbitration offers the best for obtaining commercial justice, swiftly and at a reasonable price.

]]> https://opiej.mpob.gov.my/malaysian-palm-oil-industry-at-crossroads-and-its-future-direction/ Mon, 27 Aug 2018 08:29:09 +0000 http://palmoilis.mpob.gov.my/prototype/opiej/?p=108 Read more]]> Palm oil accounts for 20% and 46% of the global oil and fats production and trade respectively. Malaysia is the world ís largest producer and exporter of palm oil with a 50% share of world palm oil production and 61% of exports. This paper assesses the growth of the Malaysian palm oil industry and the limitations of land and labour on the future growth of the industry. The industry ís competitive edge will continue to be a vital factor for its future development. Thus, in order to remain competitive, the industry needs to improve on productivity, explore opportunities to diversity the income base, widen the end-use base for palm oil, explore new marketing approaches and intensify vertical integration.

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