Overview and Outlook of Malaysian Palm Oil Exports to Europe

Table 1: A Review on MPO Export Performance (MT)
No. COUNTRY Jan – Nov 2020 Jan – Nov 2019 Diff (Vol) Diff (%) Jan – Dec 2019
  1.  
Netherlands 994,584 819,168 175,415 21.41 880,728
  1.  
Italy 415,187 452,816 (37,629) (8.31) 476,279
  1.  
Spain 179,768 448,926 (269,157) (59.96) 486,658
  1.  
Sweden 95,168 93,783 1,385 1.48 104,015
  1.  
Ukraine 49,385 33,703 15,681 46.53 33,969
  1.  
Denmark 46,720 42,065 4,655 11.07 44,345
  1.  
Germany 20,214 30,116 (9,902) (32.88) 35,310
  1.  
Georgia 19,423 12,931 6,492 50.21 18,995
  1.  
Greece 15,614 6,696 8,918 133.18 16,143
  1.  
UK 15,153 14,966 187 1.25 7,136
  1.  
Other Countries 47,045 66,634 (19,589) (29.40) 70,108
  1.  
Total 1,898,261 2,021,804 (123,543) (6.11) 2,173,687
  1.  
Export Value (RM Mil) 5,362.80 4,620.11 742.69 16.08 4,995.44

Source: MPOB

From January to Novemberr 2020, Malaysian palm oil export to the Europe region was recorded at 1.9 million MT. This was a decrease of 123,453 MT or by 6.11% compared to 2.02 million MT recorded in the same period of 2019 (Table 1). On a month to month basis, Malaysian palm oil exports to Europe increased from 131,768 MT in October 2020 to 182,924 MT (38.82%) November 2020.

In terms of value, Malaysia exported palm oil worth RM5.36 billion in this review period compared to RM4.62 billion in the same period of 2019. This is an increase of RM742.69 million or by 16.08%. This was mainly due to the higher average prices of all vegetable oils which also included palm oil products in 2020. The international average price of CPO from Jan – Sep 2020 was USD675/MT compared to USD576/MT while the average price of RBD palm olein was RM702/MT compared to USD615/MT in 2019.

Netherlands is the leading importer of Malaysian palm oil in this region with 994,584 MT or 53% of the total palm oil exported to Europe. This is an increase of 175,414 MT or by 21.41% compared 819,168 MT recorded in the same period of 2019. This higher import volume can be attributed to the increased demand from the re-exporters and traders to top up their stocks in anticipation of higher oils and fats prices which have seen an uptrend over the last quarter. The strong demand was also helped by the widening price spread between palm oil compared to sunflower in recent weeks. In the international market, the discount of palm oil to sunflower oil was USD275/MT.

Another interesting development is the rise in Malaysian palm oil exports to Ukraine which increased by 15,681 MT or by 46.53% to 49,385 MT. The total MPO imported by Ukraine thus far has exceeded the total MPO imported by the country in 2019 which was at 33,969 MT. However, these positive developments were dampened by the significantly lower imports of Malaysian palm oil by Spain which saw import declining by 269,17 MT or  by 60% as the country opted to choose palm oil from Indonesia. In the first 9 months of 2020, Indonesian palm oil exports to Spain increased by 26% from 813,000 MT to 1.02 million MT.

Breakdown of MPO Exports (MT)

In terms of products, CPO comprises as the main product exported with a total of 1,062,693 MT or 56% of the total palm oil exported. One of the main reason for this large share is the suspension of export duty for Malaysian CPO which made it more attractive for refiners to import palm oil, especially from Malaysia. Furthermore, Malaysian palm oil is certified sustainable which makes it more receptive by European buyers who demand such products. 

Table 2 : MPO exports to Europe by Products
PRODUCT Jan – Nov 2020 Jan – Nov 2019 Diff (Vol) Diff (%) Jan – Dec 2019
CPO 508,426 577,594 (69,168) (11.98) 639,693
CPO INTERNATIONAL SUSTAINABILITY AND CARBON CERTIFICATION 353,527 586,646 (233,118) (39.74) 600,089
CPO FOR RSPO FROM SEGREGATED & INT SUSTAINABILITY N CARBON CERTIFICATION 200,740 132,583 68,157 51.41 132,583
RBD PS 180,522 160,068 20,453 12.78 169,762
PAO 106,804 80,346 26,458 32.93 97,983
RBD PL 87,476 101,908 (14,431) (14.16) 104,017
RBD PO 86,409 71,922 14,487 20.14 84,171
PMF / RBD PMF 84,287 85,898 (1,611) (1.88) 91,449
PFAD 74,288 110,845 (36,558) (32.98) 113,845
CPO FOR RSPO FROM SEGREGATED 53,813 23,552 30,261 128.48 45,552
OTHERS 161,970 90,442 71,528 79.09 94,629
TOTAL 1,898,261 2,021,804 (123,543) (6.11) 2,173,772

Source: MPOB

Chart 1 : Breakdown of MPO Exports (MT)

Source: MPOB

Outlook for Malaysian palm oil in 2020 & 1st quarter 2021

Strong global demand kept Malaysian palm oil stocks unusually tight at the end of September with the biggest increases in shipments to the EU, Pakistan, and Egypt. World consumption of 17 oils and fats is forecast to increase by between 4 to 5 MMT or by 2 to 3% in 2021. This compares to a reduction of about 0.8 MMT in 2020 due to the repercussions of the COVID-19 crisis which is the first global consumption decline ever registered.

Palm oil imports have started to pick up in the third quarter of 2020 and will likely continue the uptrend into at least the first quarter of 2021. Furthermore, the insufficient world supplies of sunflower oil are likely to result in a further increase in palm oil imports. Based on market information, some traders are locking in their purchase of palm oil for the next six months in anticipation of an upward movement in most oils and fats prices. This scenario augurs well for Malaysian palm oil exports to the European region which will likely see the volume to remain within the same quantum that was recorded in 2020.

Prepared by  Mohd. Izham Hassan

*Disclaimer: This document has been prepared based on information from sources believed to be reliable but we do not make any representations as to its accuracy. This document is for information only and opinion expressed may be subject to change without notice and we will not accept any responsibility and shall not be held responsible for any loss or damage arising from or in respect of any use or misuse or reliance on the contents. We reserve our right to delete or edit any information on this site at any time at our absolute discretion without giving any prior notice.

You can share this posts: