PKC Market in the Middle East

Palm Kernel Cake is the third largest component of palm oil products imported by the Middle East.  It account for almost 10% of the total palm oil and palm products imports by the region.  The volume represent about 9% of the total Malaysian PKC exported worldwide and it was valued at US$30 million (2020).

Middle East– Palm and Palm Products Imports
2016 2017 2018 2019 2020
Palm Oil 1,410,024 1,891,211 1,878,894 1,683,250 1,696,998
Palm Kernel Oil 119,284 138,476 120,349 165,158 150,322
Oloechemical 209,494 202,166 290,507 291,020 260,118
Finished Products 127,604 105,698 170,159 147,659 135,806
PKC 204,415 129,016 285,647 252,089 231,644
Others 330 60 771 11,489
Total 2,071,152 2,466,587 2,745,555 2,539,947 2,486,294

Source: MPOB

Saudi Arabia, Turkey and Oman are the leading importers of Malaysian PKC. In 2020, Saudi Arabia accounted for the most Malaysian PKC imports where the country’s imports has grown almost doubled owing to the increase dependency on imported animal feed as the country is trying to stop green fodder cultivation in order to conserve water.  Saudi Arabia is also relying on Indonesian PKC and imported almost 200,000 MT last year.

Middle East – PKC Imports by Selected Countries
  2016 2017 2018 2019 2020
Saudi Arabia 175,113 128,976 141,666 123,045 231,440
Turkey 27,501 141,685 126,343
Oman 1,801 2,296 2,701
Jordan 40 40 80
Others 121
Total 204,415 129,016 285,647 252,089 231,644

Source: MPOB

Beside Saudi Arabia, Turkey also imported some volume of PKC from Malaysia.  While the import volume is not consistent, in the last few years, the country imported over 100,000 MT of PKC from Malaysia.  Oman import is considerably small but the volume is on the increasing trends.

Dairy Industry Prospects in Saudi Arabia

Dairy industry in Saudi Arabia has assumed its importance and the country is currently the largest dairy producers in within the GCC.  The industry is expected to grow in tandem with the growing population, improve living standard and changing in consumers’ habits and diets as well as expanding tourism sectors.

Saudi Arabia is currently the largest producers of dairy products within the GCC states.  Annually, the country produce more than 2.5 million of milk (Statista report) and the volume is expected to grow as the manufacturers’ progress with technology advancement.

While the industry has implemented advance technology, there is limitation that the country has encountered.  One of them is extreme weather and water scarcity to cultivate green fodders for the cattle feed.  Therefore the country opted to imported grass and feed meal to supplement the domestic dairy industry requirement.

Source: MPOB

PKC imports into the country is mostly supplying the needs of the dairy industry.  Companies like Almarai, the largest dairy producer, are dependent on animal feed imports to supplements its requirements.  The situation is reflected in the growing volume of PKC going into the market. The situation could further stimulate the demand for PKC by the country.

Other Middle East Market for PKC

Turkey is one of the leading producers of dairy milk, producing more than 20 million MT of dairy milk in 2020.  It is the main exporters of milk particularly the Middle East market and other parts of the world.  Turkey is also an important gateway to Iraq market.

Turkey is also not spared from facing grassland and forage issues where the quality and production has deteriorate over the years.  The country has to rely on imports of compound feeds to fulfil the growing demand.  Among the imported animal feed by Turkey include soybean meal, sunflower seed, and corn products and feed additives.

Challenges

While the future of PKC industry is bright, there is a limitation for Malaysian PKC industry to supply to Saudi Arabia should the demand rise as we need to serve other markets too.  Over the years, PKC export has grown steadily and such development is a testimony of a greater acceptance of PKC in the animal feed sector particularly the dairy cattle industry.  However, we have observed that the production has been in the range of 2.1 – 2.5 million MT of which almost everything went for export. 

Source: MPOB

At present, the main export destination for Malaysian PKC are New Zealand, South Korea, Pakistan, China and Saudi Arabia.

Source: MPOB

Conclusion

Middle East region, particularly the GCC states are the net importers of food products.  They are slowly trying to improve food sufficiency by adopting advance technology in making agriculture sector viable despite various limitation including very limited arable land, water scarcity and extreme weather condition.

Among the areas that they are trying to improve its sufficiency is livestock production. Saudi Arabia is one of the country which successfully implement advance farming method for dairy cattle industry which enable the country to come up as the top dairy producer in the GCC region.  The country has switched to animal feed meal to replace green forage and fodders in their quest to conserve water and adjust to the limitation.

PKC feed meal for livestock industry particularly dairy cattle has become the best substitute for grass-fed especially in the Middle East region.  Malaysia supply of PKC is rather limited, and the way forward is to support the market through improved formulation to maximize the benefits of PKC to the livestock industry.

Prepared by: Fatimah Zaharah

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