(File pix) Malaysia’s palm oil exports for this year is set to hit the RM70 billion target, made possible with the higher average palm oil prices and sustained global demand for the edible oil.

KUALA LUMPUR: Malaysia’s palm oil exports for this year is set to hit the RM70 billion target, made possible with the higher average palm oil prices and sustained global demand for the edible oil.

Since early this year, palm oil futures prices have been trading above RM3,000 per tonne, higher than last year’s average of RM2,600 per tonne.

“I hope the palm oil exports would be able to do better than last year’s RM67.58 billion. If prices were to go on trading at supportive levels, a 5 per cent growth to RM70 billion is achievable,” said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.

“We also hope crude palm oil output for the year would recover from last year’s 17.3 million tonnes,” he told reporters this after opening the Malaysian Sustainable Palm Oil (MSPO) certification seminar here today.

Following the end of the El Nino phenomenon, Malaysian Palm Oil Board had recently forecast crude palm oil output to recover to the 19 million tonne-level for the year.

This is good news for palm oil consuming countries around the world because Malaysia, which supplies half of the world’s palm oil saw a shortfall in output last year.

At 4pm, the third month benchmark palm oil futures slid RM23 to trade at RM3,044 per tonne on the Bursa Malaysia Derivatives Market.

Higher palm oil pricing, while directly benefiting oil palm planters, also has a multiplier effect throughout the economy. The spill-over of the palm oil industry to investors is also seen in the stock market.

Mah had previously highlighted the country’s biggest fund manager, Permodalan Nasional Bhd, and pension fund manager, the Employees Provident Fund, derive big chunks of their dividends by investing in plantation counters on Bursa Malaysia.

Plantation companies listed on stock exchange such as IOI Corp Bhd, Sime Darby Bhd, Kuala Lumpur Kepong Bhd, Boustead Plantations Bhd, Genting Plantations Bhd, Felda Global Ventures Holding Bhd, Hap Seng Plantations Bhd and Sarawak Oil Palms Bhd are significant dividend channels for investors and are key palm oil exporters.

Bondholders, which subscribe to Islamic bonds issued by plantation companies, are encouraged by the planters’ ability to repay as palm oil prices continue to trade at buoyant levels on Bursa Malaysia Derivatives Market.

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