Africa (Jan – Aug) 2020

Malaysian Palm Oil Exports Performance to Sub-Saharan Africa Region
(Jan – Aug 2020)
A Review on MPO Export Performance

Table 1: Top Importers of Malaysian Palm Oil from Sub-Saharan Africa

 Jan-Jul 2020
Jan-Jul 2019
Diff Vol.
South Africa142,713148,803(6,090)(4.09)216,406
Cote D’Ivoire32,94416,05316,891105.2229,667
DR Congo25,40232,869(7,467)(22.72)43,657

Source : MPOB

The countries in the Sub-Saharan Africa region have increased their imports of Malaysian palm oil quite considerably during Jan-Aug 2020 period compared to the same period last year by 36.92%. Kenya is the top importer of MPO from the region with 219.91% increase from just 76,150 MT last year to 243,610 MT so far this year. The surge in MPO imports in Kenya and other countries in the region especially CPO/CPL imports can be attributed to several factors.  For most countries, the import duty for processed palm oil is much higher than that of CPO/CPL. Therefore, these countries opt to import CPO/CPL instead of processed palm oil especially for countries that have large refining capacity.

From the data that have been made available, Indonesia has not been able to export CPO to the African countries as Indonesia has to fulfil its domestic requirement and biodiesel mandate, and to cater demand from other CPO importing countries such as from India and EU countries. Despite the rise in CPO export prices in the last few months, Malaysian CPO/CPL is still attractive to African buyers since the Malaysian government gives 100% exemption on crude palm oil export duty. All these factors led to the substantial rise in Malaysian CPO/CPL by Kenya, Nigeria, Mozambique and Ghana.

Since the increase of the CPO import duty by Tanzania last year, the significant role of Kenya as an East African regional palm oil hub has grown. Malaysian palm oil imported to Kenya is also rerouted to neighbouring landlocked countries such as Uganda, Rwanda and Burundi. Another reason for the increase in Kenya CPO import is because the Kenya government imposes a food fortification logo and certification policy towards vegetable oils and fats containing Vitamin A and that led to difficulty in port clearing. The policy has caused RBD Olein import volume in Kenya to drop significantly and local industry members have shifted to the importation of CPO instead.

Nigeria, despite being the largest producer of palm oil in West Africa with an estimated palm oil production of 1.22 million MT last year, still require to import palm oil from South East Asia and her neighbouring countries. MPO import to Nigeria has increased by 34.86% to 222,103 MT mostly in the form of CPO/CPL.  The situation is also similar to Ghana where palm oil import has increased by 84.59% to 151,470 MT. Most of Ghana MPO import is in the form of CPO/CPL (78.9%).

Other countries in the region that have shown considerable increase in MPO include Mozambique and Togo. Despite having free trade agreement with Indonesia, Mozambique continues to import substantial amount of MPO. Besides fulfilling its domestic requirement part of Mozambique palm oil import is also rerouted to neighbouring countries such as Malawi, Zimbabwe and Zambia.  Togo MPO imports increased by 89.50 % to 127,658 MT. Part of MPO import by Togo is also channelled to the neighbouring countries such as Nigeria, Niger, Burkina Faso, and Senegal.

Another country that shows increase in MPO import is Madagascar. Most Malaysian palm oil imports from Madagascar is in the form of CPO/CPL which has grown from 13,353 MT to 59,954 MT during the Jan-Aug 2020 period. The increase in MPO import can also be attributed to growing domestic demand driven by changing tastes and the growth in the food processing industry.

Among the countries that have reduced their imports of MPO include Angola, Benin, and South Africa. MPO imports into South Africa recorded a minimal decline of 4.09% in Jan-Aug 2020 compared to the same period last year due to economic downturn and the pandemic. The drop in Angola can be attributed to the drop of crude petroleum price which Angolan is the second largest producer in Sub-Saharan Africa. The tightening of the Nigerian border can be blamed for the drop in Benin palm oil import as most of Benin’s import is intended for the Nigerian market.

Figure 1: Monthly Export of MPO to Sub-Saharan Africa (MT)

On a month to month analysis, compared to 2019, MPO export to SSA region this year started to increase in the month of April and the upward shift continues in the subsequent months, despite coronavirus outbreak. The month of August 2020 recorded the highest imports of MPO with a volume of 293,000 MT, spurred by the escalating of imports by Kenya, Nigeria, Ghana, and Mozambique. The trend is expected to carry on towards the end of the year but not as high as the month of August 2020.

For the month of September 2020, the region is expected to import around 150,000 – 180,000 MT of MPO. CPO/CPL will continue to be the main palm oil products imported from Malaysia. Competitive prices and 100% exemption on crude palm oil export duty by the Malaysian government will entice the SSA importers to continue procuring MPO.

Figure 2: Breakdown of MPO Exports (%) Jan-Aug 2020

Source : MPOB

Crude palm oil/olein and RBD palm olein are 2 majors MPO palm oil products exported into the region with each product made up of about 50.9 % and 34.8% respectively. CPO imports have increased significantly by 109.15% compared to the same period last year. Among major importers of Malaysian CPO/CPL are Kenya (204,065), Nigeria (196,363 MT), Mozambique (169,105 MT), and Ghana (115,098).  On the other hand, RBD palm olein imports have reduced by 4.17% to 590,584 MT from 616,278 MT registered during Jan-Aug 2019. Major importers of RBD palm olein from the region include Tanzania (93,211 MT), Angola (83,572 MT), Benin (57,561 MT), and South Africa (52,557 MT).

Table 2:  Breakdown of MPO Exports Products to Sub-Saharan Africa (MT)

Diff (MT)Diff (%)Jan-Dec 2019
CPO/CPL/CPS862,875412,572 450,303109.15794,444
RBD PL590,584616,278 (25,694)(4.17)907,680
RBD PO44,03253,408 (9,376)(17.56)83,225
RBD PS43,83338,639 5,19413.4464,651
Cooking Oil89,60479,368 10,23612.90107,807
PFAD50,63032,718 17,91254.7550,180
Others13,9535,377 8,576159.497,333
Total1,695,5111,238,360 457,151 36.92 2,015,320

Source : MPOB

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