Notification on MPOB Daily Fresh Fruit Bunches (FFB) Reference Price at 1% OER

Please be informed that MPOB Daily Fresh Fruit Bunches (FFB) Reference Price at 1% OER as compared to Grade A, B & C previously has been released beginning 1st July 2020. It is hoped that the release of MPOB FFB Reference Price at 1% OER will be more beneficial to the palm oil industry, mainly smallholders. Here are some of the benefits:

1. Smallholders able to make reference & comparison between the FFB price received as against MPOB FFB Reference Price. Currently, there are many FFB mills/ dealers display their FFB purchase price at 1% OER.
2. Smallholders will aware the importance of selling high quality FFB to millers for higher oil extraction rate (OER) & better price.
3. Smallholders can easily calculate FFB price based on grade other than Grade A, B & C as used by MPOB previously. (Example: OER at 20.50%).
4. Avoid assumption that the highest OER in Peninsula is only at 20% while in Sabah and Sarawak at 22%.
5. Possibility of higher OER in the future with the implementation of MSPO (2020 - 2022). Therefore, the release of MPOB FFB Reference Price at 1% OER is in line with the current situation.

Example of MPOB FFB Reference Price at 1% OER starting 1st July 2020 are as follows:

MPOB Daily FFB Reference Price at 1% OER (Mill Gate - RM / 1% OER)

From the example, if a smallholder in the South Region obtain an OER of 20.50% from FFB mills, then the price he should receive is RM500.20 per tonne (RM24.40 x 20.5). A smallholder in Sabah obtain an OER of 22.50% from FFB mills should receive RM483.75 per tonne (RM21.50 x 22.5).

It should be noted that MPOB does not determine the price of FFB. MPOB FFB Reference Price at 1% OER is based on the current market price of CPO, PK and CPKO according to region, derived from contract registration by licensees to MPOB.

In addition, MPOB FFB Reference Price at 1% OER is only a price reference (benchmark) that can be used by sellers and buyers in their FFB sale transactions.