MPOB expects Malaysian Palm Oil demand to improve further in future

The Malaysian Palm Oil Board (MPOB) director-general (DG) Dr Ahmad Parveez Ghulam Kadir has reported a rise in Malaysian palm oil exports in recent months. Malaysian Palm Oil Board (MPOB) is a premier government agency under the Ministry of Plantation Industries and Commodities, established in Malaysia for serving oil palm industry. Main role of the MPOB is to promote and develop national objectives, policies and priorities for the well-being of the Malaysian oil palm industry. Addressing in a keynote address titled “Overview of the Malaysian Palm Oil Industry during the Pandemic and the Route to Recovery” at World Palm Oil Virtual Expo held recently, Dr. Ahmad stated that the Malaysian palm oil industry seem to have quickly adjusted with the new norm and new business model driven by the Covid-19 after experiencing a slowdown in exports and prices in the first quarter of 2020, because of the Corona pandemic.  

In context to exports review of Malaysian palm oil Dr. Ahmad said that the palm oil exports had fallen by roughly 24 per cent or 1.91 million tonnes to 6.09 million tonnes year-on-year, from January to May 2020, mainly because of weaker global demand, emerging against the lockdown imposed in most importing countries. For the first 10 months of 2020, palm oil exports were down 1.23 million tonnes or 8% or to 14.44 million tonnes from 15.67 million tonnes in the same period of 2019. 

The second and third quarters of 2020 were encouraging for the exports markets as buying from China had improved by 61.3 per cent to 776,829 tonnes and 7.3 per cent to 833,558 tonnes, respectively, after the lockdown restrictions started easing up by early April 2020.

Import demand from India began improving June onwards as Indian buyers had to replenish domestic stocks after unlocking of economic activities started in the country. India is one of the largest importers of Malaysia's palm oil. Prices regained its upward momentum thereafter mainly because of export demand revival, and lower palm oil stocks.  The average price of crude palm oil had appreciated by 28.6 per cent to RM 2,583.50 per tonne for the first 10 months of this year, from RM 2,008.50 per tonne in the same period of 2019 .

According to Dr. Ahmad Parveez palm oil exports from Malaysia were up 37.3 per cent higher to 8.35 million tonnes from June to October 2020 as compared with 6.09 million tonnes during January to May 2020. Exports to European Union for March 2020 (194,260 tonnes) and April 2020 (207,640 tonnes) were the highest recorded during January-October 2020.  

The Malaysian Palm Oil Board (MPOB) director-general Dr. is optimistic that in near future there will be further improvement in demand for palm oil, on the back of easing of the Covid-19 lockdowns in most countries and resumption of economic activities. All in all, business opportunities for palm oil will persist in forthcoming months.