Source: The Edge Financial Daily page 9
Source: The Edge Financial Daily page 9
Source: The Malaysian Reserve page 10
21 NOV 2019 / 14:31 H.
KUALA LUMPUR: The Ministry of Primary Industries is currently in talks with the Ministry of Finance (MoF) to set up a biodiesel stabilisation fund and has proposed that 3% of the windfall tax imposed on palm oil exporters be refunded and channelled back to the fund.
Its minister Teresa Kok (pix) said the windfall tax is currently imposed on palm oil exporters when palm oil prices in the physical market surpass RM2,500 per tonne.
The fund would be useful to assist the smallholders and subsidise biodiesel blending (for the petroleum companies) when CPO prices hover above diesel.
“So far the MoF did not object to the idea. They also agreed with our request that the windfall tax be channelled to the biodiesel fund,” she told reporters here today.
Earlier, Kok witnessed a memorandum of agreement between five petroleum companies and Malaysian Palm Oil Board for the upgrading of biodiesel blending facilities at 35 petroleum terminals across Malaysia.
However, the minister said it was still at discussion level and the reason being that the CPO price had only risen a few weeks ago.
Prior to the budget announcement, the CPO price was about RM2,100 and RM2,200 per tonne, she said.
She noted that the implementation of B20 in Malaysia and potentially B30 was in line with the initiative by Indonesia which is going for B30, while Thailand, B10.
“We see this as an encouraging trend. Biodiesel is the best mechanism to stabilise the CPO price and since palm oil is the third major export of the country, we can if we sustain the CPO price, also stabilise the economy indirectly,” she said. — Bernama
KUALA LUMPUR (Nov 21): Crude palm oil (CPO) prices would be able to sustain its current upward momentum if Governments, particularly those from the Council of Palm Oil Producing Countries (CPOPC), could coordinate allocation increases under the biodiesel mandates, says palm oil expert Dr James Fry.
Fry, who is also the chairman of LMC International Ltd, said if there was cooperation among Governments in the biodiesel mandates, particularly amid the decline in palm oil stocks, the move could be the best joint policy for palm oil exporters to ensure the continuation of the uptrend seen in CPO prices currently.
“Indonesia’s mandate has been the driver behind the strong growth in biodiesel demand for the region.
“With the B30 mandate allocations (of 9.59 million kilolitres of unblended biodiesel) announced for 2020, Indonesia’s biodiesel demand will rise to 8.5 million tonnes next year,” he said.
He said this during a talk entitled “Global Partnership to Sustain Palm Oil Prices” on the final day of the three-day Malaysian Palm Oil Board International Palm Oil Congress and Exhibition 2019 here today.
Fry said it is a lesser-known fact that Thailand’s biodiesel output has been increasing each year since 2017, supported by the Government’s incentives and the country’s tax system.
“(The implementation of the biodiesel mandate in) Thailand is actually slightly ahead of Malaysia each year,” he said.
To date, the CPOPC members are Malaysia, Indonesia and Colombia, while three palm oil producing countries, namely Nigeria, Papua New Guinea and Honduras, are expected to join the council in the near future.
Meanwhile, Fry said Malaysia's palm oil stocks are expected to fall to 1.6 million tonnes over the next six months from 2.35 million tonnes as of October this year due to the reduction in fertiliser application, drought, haze and slowdown in production in new areas this year.
“The slow output growth is coinciding with the boost to biodiesel mandates in the Southeast Asian countries,” he said, adding that CPO prices are anticipated to surpass US$750 (US$1= RM4.168) per tonne in the second quarter of 2020.
Currently, CPO prices are hovering between RM2,500 and RM2,600 per tonne, which are deemed as “very good” pricing among the industry players.