07/08/2008 (Forbes), Kuala Lumpur - Malaysia's palm oil exports may hit a record 50 billion ringgit ($15.5 billion) this year after a 42 percent gain in 2007, boosted by strong global demand, the Star newspaper reported Tuesday.
Palm oil exports are becoming an important source of growth for Malaysia as the manufacturing sector experiences a sharp slowdown due to weaker demand from the United States.
Last year export revenue in the palm oil industry rose to 45.1 billion ringgit from 31.8 billion ringgit in 2006. The price of crude palm oil (CPO) rose by more than 60 percent last year.
CPO prices will stay firm for at least another two years, the Star quoted Sabri Ahmad, chairman of the Malaysian Palm Oil Board, as saying.
'We expect the world demand for vegetable oils and fats to increase within the next three to four years,' said Sabri.
'China and India are expected to take the lead in demand for palm oil due to mushrooming domestic industries and increasing consumption,' he said.
China is the largest buyer of Malaysian palm oil, accounting for about 28 percent of palm oil exports.
Malaysia and Indonesia are the two leading producers of palm oil, which is usually used for cooking and soap-making but which is also increasingly used as feedstock for producing biodiesel.