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KUALA LUMPUR (Oct 27): The Minister of Plantations and Commodity Industries Datuk, Dr. Mohd Khairuddin Aman Razali, has urged companies to protect themselves using Bursa’s Crude Palm Oil Futures Contracts (FCPO) Malaysia and leverage relevant market tools to remain globally competitive.
He said the FCPO provides companies with the platform to better hedge prices in this volatile environment.
“Palm oil prices, like any other commodity price, are subject to price volatility and, as such, companies must effectively manage price risk through the hedging mechanism and leveraging FCPO.
“Since FCPO contracts are the most liquid futures contracts for CPO pricing, hedging would facilitate the management of unfavorable price risks and benefit companies in terms of profitability and sustainability,” he said in his speech on the price of palm and lauric oils. Outlook Conference & Exhibition 2020 today.
Mohd Khairuddin expressed his confidence that Bursa Malaysia Derivatives will continue to pursue the launch of new derivative products related to palm and other commodities to help the industry better manage its portfolio risk.
He said that it is also relevant that the palm oil industry continues to support the production of Certified Sustainable Palm Oil (CSPO) in line with global demand and to meet the strict requirements of consumer markets.
“This product should look risk-free for its buyers. It must be sustainable in every sense of the word, and issues such as biodiversity loss, land conflicts, deforestation, forced labor and food security concerns must be given top priority.
“We are working hard to ensure that CSPO Malaysia remains premium palm oil, God’s gift to the world,” he noted.
The palm oil industry remains the main driver and backbone of the agricultural commodity sector in Malaysia, contributing significantly to gross domestic product (GDP), foreign exchange earnings, including generating employment opportunities and improving of the standard of living in the country.
Mohd Khairuddin said that nearly a million people, including 485,788 small farmers, are directly employed in the oil palm plantation sector.
In August 2020, preliminary data from the Malaysian Palm Oil Board (MPOB) showed that Malaysia produced 12.72 million metric tons of CPO, while total exports of palm oil and palm-based products reached 16.9 million metric tons valued at RM 45.19 billion, slightly lower compared to RM45.59 billion in the same period in 2019.
Therefore, to improve exports, the government, under the National Economic Recovery Plan (Penjana), eliminated the export duty levy on CPO, crude palm kernel oil (CPKO) and refined bleached deodorized palm kernel oil ( RBDPKO), effectively from July 1 to December 31. , 2020.
“The Malaysian government will continue to assist the industry through an effective ecosystem and tax incentives to stimulate the growth of the palm oil industry, especially in the creation of niche products and downstream activities.
“It is my fervent hope that the industry shares the same vision and works hand in hand to support government initiatives in their aspiration to promote shared prosperity among their people or ‘rakyat,'” said Mohd Khairuddin.
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