Malaysian Palm Oil Exports Performance to Asia Pacific Region
(Jan – Nov 2020)
A Review on MPO Performance
|No||COUNTRY||Jan-Nov 2020||Jan-Nov 2019||Diff (MT)||Diff (%)|
|12||Papua N. Guinea||8,268||9,547||-1,279||-13.4|
During the period from January to November 2020, Malaysian palm oil export to the Asia Pacific region decreased by 339,193 MT or by 11.55% compared to the last year. This was mainly due to the lower imports by Vietnam, Japan, Indonesia and Myanmar.
Philippines recorded the highest change in volume by about 44,312 MT or by 7.48% higher to 636,814 MT. The main reason for the increase in palm oil demand is the widening 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 November, the price spread of coconut oil and palm oil was USD517 compared to USD177 in January 2020 which increased about USD340 or by 192%.
Furthermore, coconut oil production is expected to decline due to the reduction in copra harvests affected by the recent typhoon i9n addition to the trees will face biological rest after two consecutive years of heavy nut-bearing. In 2020, Philippines’ coconut oil production is anticipated to decrease by 222,000 MT or 18.6% to 972,000 MT. Low coconut oil production will prompt an increase of palm oil imports.
Malaysian palm oil export to South Korea registered an increase of 21,718 MT or 5.51% compared to same period in 2019 mainly due to their preference of Malaysian palm oil over Indonesia. Based on Oil World data, for the period January to October 2020, South Korea imported 303,000 MT of Indonesian palm oil, down by 109,000 MT or 26.5% 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 The Korea Herald, the demand of instant noodle was boosted during the COVID-19 pandemic outbreak as people remained indoors and instant noodle was the most popular dish. The biggest instant noodle company in South Korea, Nongshim is estimated to have recorded an operating profit of 33.1 billion won which up 78% from the previous year. This has created the stable demand of Malaysian palm oil in South Korea.
Malaysian palm oil exports to Vietnam registered a decline of 119,729 MT or 21.96% compared to same period in 2019, mainly due to higher palm oil import from Indonesia and higher crushing of soybeans for meals. It is reported that for the period January to October 2020, Indonesian palm oil import in Vietnam increased by 203,000 MT or 76% to 470,000 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 could result in lower palm oil imports in Vietnam. Based on the Oil World data, USA soybean import in Vietnam recorded a increase of 149,400 MT or 28.06% to 681,800 MT for the period January to October in 2020 compared to the same period in 2019.
Malaysian palm oil exports to Indonesia showed the biggest drop of 171,628 MT or by 90.09% compared to same period in 2019. The drop is mainly due to the price factor as in 2019, Indonesia took advantage during the low palm oil price period to import Malaysian palm oil for its biodiesel sector. The main palm oil products imported by Indonesia in 2019 were RBD Palm Stearin and PFAD about 185,321 MT which accounted for 94.6% of total Malaysian palm oil import in the country. While, for the period January to November 2020, the main palm oil products imported by Indonesia were PFAD and CPO about 8,961 MT and 5,999 MT respectively. These two products accounted for 79.2% of total Malaysian palm oil import for the said period.
Myanmar continuously showed a drop in Malaysian palm oil import due to strong competition from the Indonesian palm oil but the country has good potential for palm oil import but because of the price sensitive nature of the market although Indonesia dominates the market with a 90% share. Malaysian palm oil export to Japan and Taiwan also showed a decrease of 39,745 MT or 8.83% and 5,467 MT or 2.69% 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 – Nov 2020
|Malaysian Palm Products Export to Asia Pacific Region (By Products)|
|PRODUCT||Jan-Nov 2020||Jan-Nov 2019||Diff (MT)||Diff (%)|
|RBD Palm Olein*||1,424,542||1,477,059||(52,517)||(3.56)|
|RBD Palm Oil*||505,329||448,346||56,982||12.71|
|RBD Palm Stearin*||154,418||349,615||(195,197)||(55.83)|
|Cooking Oil / DPL||82,893||101,268||(18,376)||(18.15)|
|*Including ISCC, RSPO Mass Balance and RSPO from Segregated Categories|
Source: MPOB, Oil World & USDA
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