|Table 1: A Review on MPO Export Performance (MT)|
|No.||COUNTRY||Jan – Nov 2020||Jan – Nov 2019||Diff (Vol)||Diff (%)||Jan – Dec 2019|
|Export Value (RM Mil)||5,362.80||4,620.11||742.69||16.08||4,995.44|
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 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|
|PMF / RBD PMF||84,287||85,898||(1,611)||(1.88)||91,449|
|CPO FOR RSPO FROM SEGREGATED||53,813||23,552||30,261||128.48||45,552|
Chart 1 : Breakdown of MPO Exports (MT)
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
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