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Govt expects B10 programme to reduce CPO overstock

 | January 15, 2013

The government is implementing its programme to blend 10% of palm oil with diesel (B10 programme) for non-subsidised diesel users, which will help trim the current record stockpile levels of crude palm oil (CPO) that is depressing the commodity’s prices.

KUALA LUMPUR: The government is implementing its programme to blend 10% of palm oil with diesel (B10 programme) for non-subsidised diesel users, which will help trim the current record stockpile levels of crude palm oil (CPO) that is depressing the commodity’s prices.

Plantation Industries and Commodities Minister Bernard Dompok said the B10 programme is expected to wipe out the overstock soon after it is implemented by the end of the year.

“We expect the full implementation of the B10 programme by the end of this year will ease the palm oil stock to a more comfortable level of below two million metric tonnes,” he told newsmen after officiating at the Palm Oil Economic Review and Outlook Seminar 2013 in Kuala Lumpur yesterday.

According to the Malaysian Palm Oil Board, inventories in Malaysia rose by 2.4% to 2.63 million tonnes in December from 2.57 million tonnes a month earlier.

Dompok said the government has spent about RM30 million on building blending facilities which would be ready by year-end, adding that the full implementation of the B5 and B10 would help reduce one million tonnes of the current stocks.

Asked about the global economy and the expectation of CPO prices, Dompok said with the improvement of the global economy, exports of CPO are expected to be better soon.

He, however, said that CPO prices would be dictated by market forces but hoped that it would be sustainable for plantation owners, millers and refiners.

On the restructured export duty for palm oil, he said the implementation of the restructured export duty would benefit downstream industries especially the refinery sector.

Earlier in his speech, he said the global economic slowdown recorded in the third-quarter of 2012 contributed towards increasing domestic stock levels and this had resulted in lower CPO prices.

He said CPO prices hit their lowest levels in December 2012, recording an average price of RM2,052 per tonne, adding that the downward pressure on CPO prices had also impacted the export performance.

“In 2012, exports of palm oil and palm oil products based on provisional figures was recorded at RM71.39 million, a decrease of 11.2% compared to the RM80.41 billion registered in 2011,” he said.

This content is provided by FMT content partner The Malaysian Reserve.


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