Business

Tuesday November 10, 2009

CPO futures can hit RM2,625 per tonne

By HANIM ADNAN


But it can drop to RM2,350 if crude oil slides by US$10 per barrel

KUALA LUMPUR: Crude palm oil (CPO) futures on the Bursa Derivatives Exchange can hit RM2,625 per tonne by April next year if palm oil stocks remain tight and the North Brent crude oil price stays steady at US$75 per barrel, an expert told a plenary session at the Malaysian Palm Oil Board’s (MPOB) International Palm Oil Congress 2009 yesterday.

Britain-based LMC International chairman Dr James Fry also expects that the premium for CPO over crude oil prices can return to a more “normal” range at US$250 per tonne.

However, should North Brent slide by US$10 per barrel, the local CPO futures price may drop to about RM2,350 per tonne within the next five months.

Datuk Dr Mohd Basri Wahid says the goal in completing the oil palm genome sequence is to improve oil yields for the production of food, feed and fuel.

Fry’s CPO price prediction somewhat mirrors another palm oil expert, Dorab Mistry of Godrej International, who sees CPO price trading at US$2,400 per tonne by the first quarter 2010.

Since January 2007, Fry said the crude oil price movement had been the strongest price determinant of vegetable oils, including CPO.

“Previously, price forecasters and analysts used to gauge CPO using stock figures. However, now many prefer to focus on price differentials for vegetable oils versus crude oil,” he added.

Fry noted that biofuels had also become the crucial balancing item in the vegetable oil markets, helping to match demand to supply. “The price-sensitive biofuel demand somewhat stops vegetable oil prices from moving too high or too low.”

At the same time, he said the traditional strong influence of MPOB’s monthly palm oil stock figures on CPO prices had gradually declined.

Having said that, Fry agreed that Malaysia’s palm oil stock would still remain important in assessing the CPO price direction.

MPOB is expected to release the latest palm oil statistics, namely stocks, export and production, for October today.

Earlier in the first plenary session, MPOB director-general Datuk Dr Mohd Basri Wahid announced that the board had completed the sequencing of three oil palm genomes from two oil palm species via a consortium co-led by the MPOB Advanced Biotechnology and Breeding Centre and the US-based Orion Genomes.

Tan Sri Bernard Dompok (second from left) visiting the expo at PIPOC 2009. With him are (left) Datuk Sabri Ahmad and Datuk Dr Mohd Basri Wahid.

Other members of the consortium include MOgene LC and The Genome Centre at Washington University, South Korea-based Macrogen Inc and Australia-based GeneWorks Pty Ltd.

Basri said the genome sequencing effort provided a comprehensive genetic blueprint of E-oleifera and E.guineensis, including the pisifera and dura palms.

In commercial seed production, the pisifera is frequently used as the paternal line and the dura serves as the maternal palm.

“Knowledge of the genomic secquence of these oil palm varieties enabled researchers to understand the genetic differences between trees that are higher yielding or more resistant to disease than usual,” Basri said.

The goal in completing the oil palm genome sequence was to dramatically improve oil yields for the production of food, feed and fuel, he added.

In addition to the sequencing and assembling the genomes of the three palm varieties, the consortium sequenced the express genes (transcriptome) from multiple tissue types. “The transcriptome sequence will aid oil palm researchers as they seek to understand the genes responsible for yield, disease resistance and resistance to environmental stress.”

Basri said the initiative generated the most comprehensive genetic and transcriptional maps to date of the important crop.

Plans are afoot for MPOB, Orion and MOgene to study the epignetic makeup of oil palm next year in another effort to boost yields. Epignetics is the study of the pattern of chemical groups that influences whether specific genes are turned on or off.


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