Malaysian palm oil industry, worth around $ 25 billion , claims it may have lost between 6.5 and seven billion US dollars worth of business over the last 11 months due to an unprecedented fall in price.
The chief executive officer of Malaysian Palm Oil Council Yusof Basiron told a seminar here on Friday on palm oil awareness that the losses had been caused by “price destruction” by Indonesian palm oil industry, which cut prices in an unhealthy and unsustainable manner.
He said that price of palm oil fell by about a 1,000 Malaysian ringgit per tonne over the last 11 months, a dollar being worth 3.06 ringgits (Friday). The price fall has been around 30 per cent over the period.
This had resulted in stocks building up, threatening further downward spiral but for the fact that there was huge demand for palm oil in importing countries such as China and India.
Dr. Basiron ruled out any further fall in palm oil prices precisely because of the burgeoning demand the world over for cooking oil, India and China being net importers.
He said that the Malaysian government's decision to revisit the duty on export of crude palm oil held up the prospects of improving the situation though the new duty structure would be effective in January 2013.
India imported more than 8 million tonnes of palm oil last year, only around 1.6 million tonnes of it being from Malaysia.
Indonesian palm oil constitutes the bulk of Indian imports though the trend this year is that Indian importers are favouring Malaysian stocks as shown by a 50 per cent increase in imports from that country till the end of September. India is expected to import a total of more than 10 million tonnes of palm oil during the current year.
Dr. Basiron said that India constituted a major market for the Malaysian industry though India was a price-sensitive market.
(The correspondent is in Kuala Lumpur at the invitation of Malaysian Palm Oil Council.)