Asia Pacific (Jan – Aug) 2020

Malaysian Palm Oil Exports Performance to Asia Pacific Region
 (Jan – Aug 2020)
A Review on MPO Performance

NoCountryJan – Aug 2020Jan – Aug 2019Change (MT)Change (%)
3South Korea304,907276,20128,70710.39
9New Zealand18,74311,5417,20162.4
12Papua N Guinea4,8945,932-1,039-17.51
18Solomon Island19472123170.76
22Marshall Island3939#DIV/0!
24New Caledonia3249-16-33.33
25Micronesia Federation1718-1-7.96

During the period of January to August 2020, Malaysian palm oil export to the Asia Pacific region decreased by 159,893 MT or by 7.65% compared to the last year. This was mainly due to the lower imports by Vietnam, Japan, Indonesia and Myanmar. Philippines retained its position as the main destination of Malaysian palm oil exports region which recorded the highest changes in volume about 30,809 MT or by 7.4%. It showed an improvement in Malaysian palm oil export to the Philippines after the drop in 2019. The main reason for the increase in palm oil demand is the price spread between palm oil and coconut oil which makes it more attractive for domestic consumption of palm oil especially for food applications. For the month of August, the price spread of coconut oil and palm oil was USD280 compared to USD177 in January 2020 which increased about USD103 or by 58.2%.

For South Korea, Malaysian palm oil export to South Korea has registered an increase of 28,707 MT or 10.39% compared to same period in 2019 which is due to low import of Indonesian palm oil. Based on the Oil World data, for the period Jan to June 2020, South Korea imported 160,000 MT of Indonesian palm oil, down by 40,000 MT or 25% compared to the same period in 2019. In South Korea, palm oil is primarily used for food processing, especially instant noodle production. Based on the article written by Nikkei Asian Review, Asian instant noodle makers see the demand of instant noodle boost during the COVID-19 pandemic outbreak. For example, the biggest instant noodle company in South Korea, Nongshim, recorded a revenue growth of 17.2% for the first half of 2020 from the same period of 2019 to 1.35 trillion won (USD1.13 billion).

Malaysian palm oil exports to Vietnam has registered a decline of 41,114 MT or 11.4% compared to same period in 2019, mainly due to increase in palm oil import from Indonesia and high import of soybeans from the USA. It is reported that for the period January to June 2020, Indonesian palm oil import in Vietnam increased by 39,000 MT or 23.9% to 202,000 MT compared to same period in 2019 due to the competitive price offered by Indonesian suppliers. Also, Vietnam is currently recovering from the 2019 African Swine Fever (ASF) outbreak and as a result, it is anticipated that there will be an increase in soybean domestic crushing activities. For this year, it is estimated that the soybean import will increase to cater to the demand for domestic feed requirements which will also increase the availability of soybean oil in the market for local consumption. This will translate into slow palm oil imports in Vietnam. Based on the Oil World data, USA soybean import in Vietnam recorded a tremendous increase of 180,800 MT or 75.7% to 419,600 MT for the period January to July in 2020 compared to the same period in 2019.

While Myanmar continuously showed a drop in Malaysian palm oil import due to strong competition from the Indonesian palm oil. Myanmar has good potential for palm oil import but because of the price sensitive nature of the market, Indonesia dominates the market with a 90% share. Malaysian palm oil export to Japan and Taiwan also showed a decrease of 24,060 MT or 7.41% and 3,961 MT or 2.7% respectively. This decline was mainly due to the demand disruption caused by the global pandemic outbreak, COVID-19.

Breakdown of MPO Exports to the Asia Pacific Region (MT) Jan – Aug 2020

Malaysian Palm Products Export to Asia Pacific Region  (By Products)
PRODUCTJan-Aug 2020Jan-Aug 2019Diff (Vol)Diff (%)
RBD Palm Olein987,9231,038,100    (50,177)        (4.83)
RBD Palm Oil334,985294,774       40,211        13.64
RBD Palm Stearin120,031280,814  (160,783)     (57.26)
Palm Fatty Acid Distillate112,578154,477    (41,899)     (27.12)
Cooking Oil59,62972,680    (13,050)     (17.96)
Palm Acid Oil62,74350,464       12,278        24.33
Others251,956198,429       53,526        26.98
Total1,929,8452,089,738  (159,893)        (7.65)

Source: MPOB, Oil World & USDA

For more info please contact Mrs Rina Mariati
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*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.

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