KUALA LUMPUR, March 20 (Bernama) -- The price of palm oil, which has beentrading upwards since November 2001, is projected to strengthen further toRM1,250 per tonne in 2002 on rising demand and tight global supply, BankNegara Malaysia (BNM) said in its 2001 Annual Report Wednesday.
During the January-July 2001 period, the export price remained belowRM1,000 per tonne.
However, due to lower supplies of palm oil, particularly since August andencouraging demand from Malaysia's traditional buyers, the price breachedthe RM1,000 level and remained above that level for the rest of the year.
For 2001 as a whole, palm oil prices averaged at RM944 per tonne. BNM saidthe crude palm oil production, which accounted for 35 percent of totalvalue added in the agriculture sector, increased by 8.9 percent in 2001.
This was due to newly-matured trees, particularly in Sabah, which hadhigher yields and the volume of oil extracted was higher in line withfavourable weather conditions.
BNM also said the government took action to extend the application periodfor the oil palm replanting scheme to the end of June 2002 in order toreduce 200,000 hectares planted with oil palms older than 25 years.
BNM said export prices of saw logs, sawn timber and rubber are forecast toimprove as external demand for these commodities is expected to pick up,particularly in the second half of 2002.
Based on the current progress in the implementation of the certificationscheme by Malaysian Timber Certification Council (MTCC), MTCC-certifiedtimber products are expected to be available in the market by mid-2002.
The certificate scheme was launched in January 2002 to provide buyers ofMalaysian timber products the assurance that the products are sourced fromsustainably managed forests.
Reflecting the lower export prices and export volume, BNM said totalearnings from rubber exports (including reexports) declined by 26.6percent in 2001.
As a whole, BNM said value added in the agriculture, forestry and fisherysectors expanded by 2.5 percent in 2001 due to higher crude palm oilproduction and higher output of livestock, fruits and vegetables.
In the mining sector, BNM said it grew moderately by 0.2 percent in 2001due to higher production of natural gas, which increased by 3.2 percent inresponse to higher demand, particularly from domestic power generationsub-sector.
The district cooling system sub-sector also recorded an increase in demandfor gas as well as external demand for liquefied natural gas, albeitmarginally by 0.4 percent. -- BERNAMA