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LIST OF ARTICLES

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Article Info

Vol 2 No.1 (2002) p45-49
Counter-Trade: The Malaysian Experience
N.Balu and Norfadilah

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Abstract


Counter-Trade: The Malaysian Experience

A detailed explanation of the various types of counter-trade is presented,
ranging from barter to counter-purchase to buy-back to offset. Apart from
outlining the framework agreement on counter-trade, actual case examples
of counter-trade deals undertaken in Malaysia are also highlighted. In
this respect, counter-trade deals involving government-to-government transactions as well as deals entirely transacted on the basis of private sector
involvement are also elucidated. By doing so, further explanations are
given to explain modifications that need to be done to the existing countertrade models, taking into account the peculiarities of each varying trading
environment.

Keyword(s): PALM OIL ; COUNTER TRADE ; BARTER TRADE ; IMPORT SUBSTITUTION ; MPOB PUBLICATIONS

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Article Info

Vol 2 No.1 (2002) p34-44
A Financial Study of Cattle Integration in Oil Palm Plantations
Jusoh Latif and Mohd Noor Mamat

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Abstract


A Financial Study of Cattle Integration in Oil Palm Plantations

In the context of government efforts at reducing beef imports, integrated cattle rearing in oil palm plantations is a useful method for producing cattle locally. FELDA and ESPEK and some other organizations are recent participants of the cattle-under-oil-palm programme. Oil palm plantations with trees of seven years or older can produce 500 kg per hectare per year of dry matter, which is sufficient to justify grazing by cattle. One animal requires about 2.5% to 3% of its body weight in grass uptake and an animal which is one to two years old, requires about 3 ha of oil palm area for grazing. This animal is controlled from straying about by electric fencing. Each enclosure of about 4 to 6 ha requires two workers to manage.
This study shows that, in the cases of three estates that were studied, cattle rearing under oil palm can be pursued successfully. The average weight gain of cattle aged between one to two years old was 250 g to 300g per head per day. The calving percentage was more than 50%, while the mortality rate was below 5%t. The average cost of maintenance was low. An average price of RM 5.50 per kg live weight was obtained during normal times but increased to RM 6.50 per kg during festive seasons.
Prices of RM 4.00/kg, RM 4.50/kg and RM 5.00/kg live weight were used to account for the final stock value, depending on the age and sex of the animal. The IRRs obtained from integrated cattle rearing in oil palm plantations, ranged from 25% to more than 50% and the reduction in the cost of weeding ranged from 17% to 38%. That was an additional benefit from the production system adopted.

Keyword(s): OIL PALM-Cultivation ; INTEGRATED FARMING ; CATTLE REARING ; OIL PALM ESTATES & PLANTATIONS ; FEASIBILITY STUDIES ; MPOB PUBLICATIONS

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Article Info

Vol 2 No.1 (2002) p28-33
Factors Affecting Fluctuations in Net Returns from the Processing of Oil Palm Fruit Bunches
Mohd Arif Simeh

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Abstract


Factors Affecting Fluctuations in Net Returns from the Processing of Oil Palm Fruit Bunches

This paper attempts to elucidate factors which affect the efficiency of oil palm fruit processing in a selected palm oil mill. Three efficiency proxies are used, i.e. revenue per tonne (RPT) of fresh fruits bunches (FFB), cost per tonne (CPT) and net revenue per tonne (NRPT), with the analysis being focused on a 30-month time series data. From the study, it was found that the RPT of the mill was positively correlated with the differentials in the oil extraction rate and kernel extraction rate (KER), differentials in crude palm oil (CPO) price as well as FFB intake. The differentials in OER and KER, in particular, were significant income generators, as they resulted in increases in RPT as high as 20% and 12% respectively. Nevertheless, both OER and KER had declined at the rate of 0.27% and 0.22% per month, respectively and the processing toll was negatively correlated with RPT by 1%, indicating the need to crosscheck the sources of RPT variability. The study also identified two causal factors, which affected CPT variability. These comprised maintenance, either major or routine, and depreciation. The study also revealed that the amount of FFB received was positively correlated with either RPT or NRPT and was found significant in reducing CPT. This implied economies of scale, as denoted by the significance of the utilization factor and workers’ overtime.

Keyword(s): PALM OIL ; PALM OIL MILLS ; FRESH FRUIT BUNCHES ; PALM OIL-Processing and milling ; PROFITS ; MPOB PUBLICATIONS

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Article Info

Vol 2 No.1 (2002) p19-27
An Economic Analysis of the Malaysian Palm Oil Market
Basri Abdul Talib and Zaimah Darawi

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Abstract


An Economic Analysis of the Malaysian Palm Oil Market

The objectives of the study are to describe a national model of the Malaysian palm oil market and to identify the important factors affecting the Malaysian palm oil industry. The model is estimated by taking into account total oil palm area, oil palm yield, domestic consumption, exports and imports over the period of study between 1970 and 1999. The results show the importance of the Malaysian economic activity, the exchange rate and world population in affecting the palm oil industry. Other factors are palm oil stock level, price of palm oil, technological advancement in production technique and the price of soyabean oil

Keyword(s): PALM OIL ; MARKET DEVELOPMENT ; PALM OIL AND OIL PALM INDUSTRY-Malaysia ; FORECASTS ; STATISTICS ; ECONOMICS ; MPOB PUBLICATIONS

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Article Info

Vol 2 No.1 (2002) p11-18
The Optimal Age of Oil Palm Replanting
Azman Ismail and Mohd Noor Mamat

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Abstract


The Optimal Age of Oil Palm Replanting

Malaysia is expected to only contribute 45.6% of the world palm oil output in 2005, a decrease of 4.5% compared to production in the year 2001. The declining contribution to world palm oil output is in part attributed to the lower production due to the increase in the aged oil palm trees.It is important that old palms, which are less economic to maintain be replanted, hence ensuring a continuous productive Malaysian oil palm industry. The question arises as to what age is oil palm economically suitable for replanting?
The objective of this paper is to determine the optimum age for oil palm replanting. Following Faris (1960) the optimum age of replanting is when the marginal net revenue in year n of the present stand is equal to or exceeds the amortised value of net revenue in year n of the second stand.It is concluded from this analysis that the optimum replanting age depends on the price of fresh fruits bunches (FFB), cost to establish and maintain new palms, technology that changes the yield profile, and the discount rates adopted. In Malaysia, it is found that the optimal replanting age lies
between 25 and 26 years if the FFB price is RM 200 per tonne. The replacement age declines to between 24 - 25 years if the FFB price rises to RM 220 per tonne.

Keyword(s): OIL PALM-Cultivation ; OIL PALM SEEDLINGS ; PLANTING AND REPLANTING ; MPOB PUBLICATIONS

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Article Info

Vol 2 No.1 (2002) p1-10
Palm Oil and Its Global Supply and Demand Prospects
Yusof Basiron

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Abstract


Palm Oil and Its Global Supply and Demand Prospects

The paper outlines the global palm oil situation and highlights the developments in the Malaysian and Indonesian palm oil industry. Palm oil has played a positive role in the world oils and fats supply and demand equation largely due to its techno-economic advantages and versatility as well as some of the developments in the world in relation to security of supply, health and environment. The paper will also discuss the various challenges confronting palm oil in the world market, namely self-sufficiency policies by developing countries, crop subsidies by developed countries,stringent standards and quality for trade, non-tariff technical barriers and effects of exchange rate variations.

Keyword(s): PALM OIL ; PALM OIL AND OIL PALM INDUSTRY-Malaysia ; OILS & FATS INDUSTRY ; SUPPLY ; DEMAND ; PRODUCTION FORECASTS ; PRODUCTIONS STATISTICS ; MPOB PUBLICATIONS

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Article Info

Vol 1 No.1 (2001) p21-27
Improving Productivity:The Replanting Imperative
Idris Omar, Azman Ismail and Chang Lin Chong

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Abstract


Improving Productivity:The Replanting Imperative

The replanting of old and uneconomic palms is one of the more practical strategies to improve oil palm productivity. High productivity will ensure that the oil palm industry continues to remain competitive even during times of low palm oil prices. In order to maintain a good productivity level, the percentage of tall and ageing palms should be small and preferably less than 10%. Changing the age profile by reducing the tall and ageing palms from the current 21.6% should improve the national fresh fruit bunches(FFB) yield. This could be done through replanting as seen from the analysis of the age profile which showed that by end of 2000, about 264 074 ha(7.8%) were in dire need of replanting. A hypothetical cash flow exercise at different FFB prices comparing immediate replanting against delayed replanting for 25-year old palms was done. Immediate replanting is referred to as replanting palms at the age of 25 years and delayed replanting is referred to as replanting of palms at the age of 30 years. At the end of the 10th year, the price sensitivity analysis showed that immediate replanting was viable when the price of FFB was at least RM 135/t. At this price, the accumulated Incremental Net Revenue (INR) is RM 5601/ha. At a 10% discount rate, the incremental Net Present Value (NPV) and Internal Rate of Return (IRR) were RM 34 and 10.1% respectively. The break-even price would be lower if the increase in the cost of replanting in the next five years had been taken into consideration. It is concluded that immediate replanting is economically viable when the long-term FFB price is at least RM 135 t-1.

Keyword(s): OIL PALM-Cultivation ; REPLANTING ; LAND PREPARATION ; PLANTING MATERIALS ; MPOB PUBLICATIONS

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Article Info

Vol 1 No.1 (2001) p17-20
MPOB Daily FFB Reference Price:Towards a More Transparent Market
Jamil Nordin, D. Chandramohan, Yusof Basiron and R.Venugopal

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Abstract


MPOB Daily FFB Reference Price:Towards a More Transparent Market

The objective of this paper is to give a detailed explanation regarding the dissemination of the MPOB Daily Fresh Fruit Bunches (FFB) Reference Price. The paper will highlight the price formula used and the computation of the Reference Price according to the various regions. The Reference Price is meant as a guide to assist the smallholders in determining their FFB price in relation to crude palm oil (CPO) and palm kernel (PK) prices. The single reference price will create a transparent market in FFB trading, which will help towards ensuring a more harmonious relationship amongst smallholders, FFB traders and millers.

Keyword(s): PALM OIL & OIL PALM INDUSTRY ; FFB YIELDS ; PRICES ; PRODUCTION COSTS ; WORLD MARKET

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Article Info

Vol 1 No.1 (2001) p10-15
Strategic Thrust in Addressing Current Challenges :The Plantation Perspective
Khoo Khee Ming

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Abstract


Strategic Thrust in Addressing Current Challenges :The Plantation Perspective

The paper briefly analyses the problems currently faced by the plantation companies and explains why the price of crude palm oil (CPO) has fallen month by month through 2000, with sharper falls since January 2001 and why the price has not recovered. Some fundamental strategies to help the palm oil industry sustain through these difficult times and to strengthen and transform it overtime are suggested, covering stock reduction and management, marketing and sales, shipping, port improvements, improving storage capacities in mills and refineries, replanting and revamping the organization structure of estate management. The intention is to trigger further thinking and discussion which hopefully will lead to positive actions.

Keyword(s): PALM OIL ; PLANTATION MANAGEMENT ; PALM OIL & OIL PALM INDUSTRY-Malaysia ; PRODUCTION FORECAST ; MPOB PUBLICATIONS

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Article Info

Vol 1 No.1 (2001) p1-9
Global Oils and Fats Business :Challenges in the New Millennium
Yusof Basiron

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Abstract


Global Oils and Fats Business :Challenges in the New Millennium

This paper outlines the world oils and fats supply and demand situation focusing on production and disappearance, which is forecast to grow by 2.3% per annum respectively by the year 2020. Amidst this scenario of continued growth, the oils and fats industry is expected to encounter various challenges, namely resource constraints, lower productivity (yield), rising cost of production, impediments to market access arising from agricultural and export subsidies. In addition, in the effort to maintain continued market growth and increased market share, the oils and fats industry would have to intensify new product development and venture vigorously into more value-added products. Apart from this, the growing health concerns of consumers and how they have dictated food legislation/regulations will also be elucidated. Issues of concern in this category include the formation of trans-fatty acids arising from hydrogenation. Increasing pressure exerted by non-governmental organizations (third sector) will also be highlighted with respect to food standard formulations and environmental protection based on ecological balance. Finally, the paper advocates the need for closer co-operation amongst both producers and exporters of oils and fats so that benefits are mutually reaped

Keyword(s): PALM OIL ; PALM OIL PRODUCTS ; OILS & FATS INDUSTRY ; MARKET DEVELOPMENT ; RESEARCH & DEVELOPMENT ; MPOB PUBLICATIONS

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© Malaysian Palm Oil Board (MPOB). All Rights reserved.
No part of this publication may be reproduced, stored in a retrieval system,
in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the publisher.

This online publication is electronically compiled by Palm Information Centre, Malaysian Palm Oil Board (MPOB)
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