File Photo: A worker unloads palm oil fruits from a lorry inside a palm oil factory in Salak Tinggi, outside Kuala Lumpur. Photograph:( Reuters )
Malaysia expects the country palm oil stocks to end the year at 2.1 million tonnes or remain at the current level of 2.25 million tonnes, according to the state news agency Bernama
In end of December 2018, Malaysia's inventory recorded a near two-decade high of 2.3 million tonnes, data from the Malaysian Palm Oil Board (MPOB) showed.
The industry regulator expects the introduction of the B20 biodiesel programme in the country to increase local consumption to 25% versus the current 18%.
"We will be very happy if the stocks can reduce further to between 1.5 million tonnes to 2.0 million tonnes especially with the implementation of the B20 programme to kick in next year," Ahmad Parveez Ghulam Kadir, MPOB director-general told Bernama.
"It is my wish to see the crude palm oil price trading at RM3,000 per tonne."
Malaysia, the world's second-largest producer of palm oil, increased the proportion of palm oil used in biodiesel to 10% from 7% last December to increase domestic consumption.
It plans to roll out the 20% biodiesel programme in stages next year. Kadir said he expects 70% of oil palm plantation across the tropical Southeast Asian nation to be certified with the Malaysian Sustainable Palm Oil (MSPO) certification by February.
Currently, about 60.6% of total oil palm plantation are MSPO certified.
"With our full-fledged MSPO-certified palm oil, after three to four years down the road, Malaysian palm oil productivity will start catching up. But whatever production we produce, I hope stocks are always manageable and the crude palm oil price should not go below $603.78 per tonne," Kadir said.
The MSPO certification, which requires growers to meet certain standards on protecting the environment and workers' rights, is set to be mandatory from January 2020.
WATCH: Gravitas: Indian Traders Boycott Palm Oil From Malaysia