Oil Palm Industry Economic Journal

ABSTRACT

Changing Market Trends in the Oils and Fats Sector
The contribution of the oil palm industry to Malaysia’s economic development has indeed been impressive. Changing market trends and rapid developments in competing oils has, nevertheless, continued to pose challenges to palm oil in terms of market opportunities. This article provides an overview of the developments that the oils and fats industry has undergone in terms of world balance, with special reference to palm oil price and market performance.

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World Biodiesel Viability Amidst High Feedstock Prices
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.

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Price Dynamics of Malaysian Palm Kernel Expeller
The price of palm kernel expeller (PKE) moves at the lower range as compared to other oilmeals, particularly soya bean meal. The main use of PKE as ingredients in ruminant feedstuff does not fetch a good price for PKE due to the highly competitive world oilmeals market. Applications of PKE in the food sector with technology advancement provide some hope for PKE to obtain a better price in the future. The widening uses and the improved quality of PKE will improve the market of PKE either locally or internationally.

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Malaysian Palm Oil Supply Chain: The Role of the Oil Palm Nursery Operators
The function of the oil palm nursery sector is to produce high quality oil palm planting materials to the growers. Therefore, to ensure the smooth operation of the whole supply chain of the Malaysian palm oil industry, this subsector should operate efficiently. Ineffective management at this point will affect directly the efficiency of the oil palm producers and indirectly the other subsectors in the oil palm chain. Hence, when some of the oil palm nursery operators are inefficient, the producers and other subsectors will be negatively affected. A study found that there is room for improvement to enable these nursery operators to become efficient. Among others, they can become efficient if they are subjected to mandatory oil palm nursery certificates of competency (OPNCC). Sufficient knowledge on how to operate their nurseries well should be provided, especially to the new operators. Elements of inefficiency among some of them could thus be solved through MPOB to ensure that they are able to produce seedlings of a high quality.

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