Americas (Jan – May) 2020

Malaysian Palm Oil Exports Performance to Americas Region
(Jan – May 2020)
A Review on MPO Export Performance

 COUNTRYJan-May 2020Jan-May  2019Diff (MT)Diff (%)
18St. Lucia59.49103.39(44)(42.5)
22St. Vincent2217527.9
26Costa Rica1818
27St.Kitts and Nevis17.32017N/A
28Neth Antilles021.87(22)(100.0)
 Grand Total275,589327,791(52,202)(15.9)

Source : MPOB

For January-May 2020, total MPO exports to the Americas region were recorded at 275,589 MT compared to 327,791 MT recorded in the same period of 2019. This represents a decline of 52,202 MT or by 15.9% compared to the same period of 2019. USA retains its position as the main importer of palm oil in the Americas region with 247,793 MT which is 47,542 MT or 16.1% lower than the volume recorded in the same period of 2019 and it also represents 89.8% of the total Malaysian palm oil exported to this region.

The decline in palm oil import by USA was due to lower demand of all oils and fats during the coronavirus lockdown where industrial and commercial use of palm oil had reduced since they had to operate under low capacity. As for palm oil products imported, RBD palm olein was the main Malaysian palm product imported by this region at 91,760 MT or at 33.2%, followed by RBD palm stearin (25%) and RBD palm oil (24%).

Breakdown of MPO Export (MT) January-May 2020

PRODUCTJan-May 2020Jan-May 2019Diff (MT)Diff (%)
RBD PL91,760103,949(12,189)(11.7)
RBD PS68,03473,232(5,198)(7.1)
RBD PO69,41190,693(21,282)(23.5)
Source : MPOB

Malaysian palm oil exports to the USA

Malaysian Palm Oil Export to USA  (By Products)
PRODUCTJan-May 2020Jan-May 2019Diff (MT)Diff (%)
RBD PL80,80991,887(11,078)(12.1)
RBD PS67,51271,611(4,099)(5.7)
RBD PO65,56685,477(19,911)(23.3)
Source : MPOB

For January-May 2020, MPO intake by USA decreased by 47,542 MT or by 16.1% compared to the same period of 2019. RBD palm stearin, RBD palm olein and RBD palm oil are the top three products imported by the US comprising almost 90% of the total import of Malaysian palm products.

The main reason of the decline in MPO import by the US was due to low industrial and commercial demand during the coronavirus lockdown where industrial plants had to operate under low capacity while the food industry such as hotels and restaurants limited their operation hours or even ceased operation. Preventive measures undertaken by the US in slowing down the spreading of COVID-19 may affect palm oil consumptions and imports in 2020. Some major industrial companies have closed facilities and are mulling the extent of layoffs to help curb the spread of the virus, as well as for economic reasons.

As the COVID-19 crisis continues many global industrial products companies are facing challenging times including production stoppages, due to supply chain disruption, cost escalation and workforce dislocation. Consumer products companies are facing serious disruption in the supply of raw and finished materials as well as critical components because of the COVID-19 impact. The manufacturing sector is poised to be hit hard during this outbreak because slowed economic activity has reduced demand for industrial products in the US and globally. Travel restrictions, social distancing and stay-at-home orders will affect the food industry, causing decline in demand for restaurants and hotels.

Other than that, palm oil also faced stiff competition with other vegetable oils. For the Jan-May 2020 period, USA imported more rapeseed oil mostly from Canada (i.e. canola oil) under Canada-US Free Trade Agreement which provided zero percent tariff between the two countries. Attractive prices made sunflower oil a good “value for price” option in early 2020, resulting in higher imports of sunflower oil by the US.

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