The designation of POIC Lahad Datu as a Tender Port for Crude Palm Oil (CPO) and Palm Olein Futures Contracts serves as an affirmation that the State Government is doing something right – to be an attractive investment destination, said Chief Minister Datuk Seri Shafie Apdal.
“I am glad that the Asia Pacific Exchange Pte Ltd’s (APEX) evaluation of Lahad Datu as a possible candidate to be chosen as their third Tender Port for CPO and Palm Olein Futures Contract in Malaysia has resulted in a positive outcome,” the Chief Minister disclosed at a special three-in-one ceremony for the announcement of the said designation yesterday.
“The designation of POIC Lahad Datu to play this role at this point in time would support the Sabah Government’s continuing efforts to develop the palm oil industry and facilitate development in the east coast of Sabah. It’s an affirmation that we are doing something right; that indeed Sabah has much to offer as an attractive investment destination,” he added.
Shafie pointed out that the designation will directly link the local industry players with the international buyers through APEX.
He said that local traders of CPO and Palm Olein will have more options at their disposal and will now be able to view and price their products based on the prices that are continuously displayed on APEX’s platform.
“These expanded options for local industry players will lead to a fairer pricing for our CPO and Palm Olein. Currently, the prices of Sabah Crude Palm Oil and Palm Olein are at a significant discount as compared to West Malaysia. This discount (commonly referred to as the Sabah discount) may range between USD20 to USD30 based on production as well as demand from the major players.
“Through APEX, this price discount will be fixed at USD10 per metric tonne as compared to West Malaysia and USD5 per metric tonne discount compared to Dumai and Belawan in Indonesia,” said Shafie.
In this regard, he said, the palm oil delivered from Lahad Datu will be the cheapest among APEX’s five tender ports. This will make trading palm oil through Lahad Datu more attractive.
Other than the announcement of the said designation, the three-in-one event also marked the official launch of the POIC Lahad Datu Bulking Terminal and the signing of the service agreement between POIC Bulk Terminal Sdn Bhd and APEX (to designate the terminal as a Port Tank Installation (PTI))
Meanwhile, Deputy Chief Minister cum POIC Sabah Sdn Bhd chairman Datuk Seri Wilfred Madius Tangau said that APEX’s decision to come in would further complement POIC Lahad Datu to develop the downstream palm oil sector.
“As a Tender Port for CPO and Palm Olein futures contract traded via the APEX platform, POIC Lahad Datu will serve as a physical point of delivery for the two commodities. It will become a port for sellers to ship out these two commodities and for buyers to accept physical deliveries of these two commodities,” he said.
Tangau added that with APEX’s designation of POIC Lahad Datu as its first Tender Port in East Malaysia, the horizon for the local palm oil industry have been further broadened.
Also present at the event were APEX chief executive officer cum founder, Eugene Zhu, POIC Sabah Sdn Bhd chief executive officer, Datuk Dr. Pang Teck Wai and Assistant Trade and Industry Minister, Ben Chong.