Malaysia Needs To Sustain CPO Prices At Current Level

"Once the prices of CPO and palm olein are too high, there is a tendency for consumers to switch to other oils that are less expensive," he told reporters after an appreciation ceremony held in conjunction with the recently concluded Malaysian International Commodity Conference and Showcase 2007 here today.

Chin said there used to be a gap with the prices of CPO lower compared to alternatives like soyoil and rapeseed.

"But now the gap is closing. Because of that there are cases of people switching to their traditional oils in Europe," he said, noting that there has been a slight decrease in CPO exports to the European Union.

However, the minister said that at the present level, the Malaysian export market was doing quite well with an increase in the total volume over the last six months.

Currently, he said, the impact on the country's exports from high CPO prices was not that much because China has been buying a lot while demand was also increasing from Pakistan and India.

"However, it would be better that we don't have the prices going too high," Chin said.

"As sellers, we should be aware that if the commodity prices are too high, people tend to switch to cheaper alternatives," he said.

Source: Bernama