This article first appeared in The Edge Financial Daily on March 7, 2019 - March 13, 2019

KUALA LUMPUR: After a year of bleak crude palm oil (CPO) prices, FGV Holdings Bhd, the world’s largest CPO producer, expects this year to be a “turning point” for the palm oil industry.

“I believe it will be a turning point this year [as] we get a clearer picture about government policies, as well as the market supply and demand situation,” FGV chairman Datuk Wira Azhar Abdul Hamid told The Edge Financial Daily on the sidelines of the Palm & Lauric Oils Price Outlook Conference & Exhibition 2019 here yesterday.

He said the group will focus on improving productivity and weeding out inefficiencies.

The group is also adopting a conservative stance this year, with a projected average CPO price of RM2,250 a tonne, he said.

“We are not going to be too optimistic, nor will we be too pessimistic. For us, we are looking at an average of RM2,250 a tonne [this year]. Because really, there is nothing that can tell me that things are moving in terms of pricing.

“I don’t see reasons to change [the current estimates we have for CPO prices],” said Azhar, though he added that the high palm oil stockpile remains worrying.

“The [impact] from the biodiesel mandate takes a while to kick in although the government has decided on the B10 mandate. It is not going to happen immediately. I would say for 2019, we are not going to be too adventurous,” he added.

Asked on his thoughts on the possibility of an El Nino weather pattern forming this year, which could lend support to prices, Azhar said different pockets of FGV’s plantation are experiencing different types of weather conditions.