Malaysian Palm Oil Export to Sub Continent Region
(Jan – May 2020)
A Review on MPO Export Performance
During the period of Jan-May 2020, Malaysian palm oil export to the Sub-Continent region registered a decline to 928,734 MT from 2,723,853 MT, which was recorded in Jan-May 2019. This represents a reduction of 1,795,119 MT or 65.9% (refer to Table 1). Major decline of MPO export to India remains the main factor contributing to the overall reduction of MPO exports to this region.
Table 1: A Review on MPO Export Performance (MT)
| No. | Country | Jan-May 2020 | Jan-May 2019 | Diff (Vol) | Diff (%) |
|---|---|---|---|---|---|
| 1. | Pakistan | 443,914 | 435,607 | 8,307 | 1.9 |
| 2. | India | 151,106 | 2,161,603 | (2,010,497) | (93.0) |
| 3. | Sri Lanka | 78,915 | 37,279 | 41,636 | 111.7 |
| 4. | Bangladesh | 189,473 | 22,538 | 166,935 | 740.7 |
| 5. | Afghanistan | 35,799 | 28,016 | 7,783 | 27.8 |
| 6. | Kazakhstan | 6,688 | 12,728 | (6,040) | (47.5) |
| 7. | Nepal | 1,602 | 3,029 | (1,427) | (47.1) |
| 8. | Turkmenistan | 531 | 461 | 70 | 15.2 |
| 9. | Uzbekistan | 17,647 | 18,748 | (1,101) | (5.9) |
| 10. | Maldives | 2,722 | 3,222 | (500) | (15.5) |
| 11. | Kyrgyzstan | 337 | 378 | (41) | (10.8) |
| 12. | Tajikistan | 0 | 244 | (244) | 0.0 |
| 13. | Bhutan | 0 | 0 | 0 | 0.0 |
| Grand Total | 928,734 | 2,723,853 | (1,795,119) | (65.9) |
Malaysian palm oil export to Bangladesh continues to witness an impressive growth of 740.7% during Jan–May 2020 period, as compared to the corresponding period of 2019. Total import quantity of MPO during this period was recorded at 189,473 MT against 22,538 MT registered during the same period last year. The significant growth of MPO export can be contributed to the price competitiveness of MPO vis-à-vis Indonesian palm oil (IPO). Competitive price of RBD Olein at C&F level vis-a-vis its other competitor such as CDSBO has also contributed to the increase of MPO export into Bangladesh during this period.
Malaysian palm oil exports to Sri Lanka remains steady with a growth of 111.7% or 41,636 MT recorded during the first five months of 2020. Large palm oil import from Malaysia to Sri Lanka could be due to the restriction on MPO into India and hence the exports have been diverted to Sri Lanka. For Jan-May 2020, data from MPOB shows that Sri Lanka has imported a total of 78,915 MT of palm oil and its products from Malaysia and this amount could end up being re-exported to India. Sri Lanka in the past had been importing large volumes of MPO which they re-exported to India as local traders took advantage of the India-Sri Lanka Free Trade Agreement to export products to India at zero duty.
Table 2: Breakdown of MPO Exports (MT)
| PRODUCT | Jan-May 2020 | Jan-May 2019 | Diff (Vol) | Diff (%) |
|---|---|---|---|---|
| RBD PL | 513,608 | 1,509,972 | (996,364) | (66.0) |
| CPO | 139,575 | 833,911 | (694,336) | (83.3) |
| CO / DPL | 87,903 | 108,470 | (20,567) | (19.0) |
| RBD PO | 67,705 | 67,998 | (294) | (0.4) |
| CPS | 2,496 | 44,616 | (42,121) | (94.4) |
| CPL | 68,173 | 60,457 | 7,716 | 12.8 |
| PFAD | 23,156 | 35,054 | (11,898) | (33.9) |
| PAO | 11,554 | 32,244 | (20,689) | (64.2) |
| RBD PS | 5,098 | 15,569 | (10,471) | (67.3) |
| HPO | 3,219 | 7,105 | (3,885) | (54.7) |
| OTHERS | 6,247 | 8,458 | (2,210) | (26.1) |
| TOTAL | 928,734 | 2,723,853 | (1,795,119) | (65.9) |
Overall, Malaysian palm oil and palm products exports to the Sub-Continent region decreased by 65.9% (refer to Table 2). Only export of crude palm olein (CPL) recorded an increment of 12.8%. The rest of palm products recorded reductions with the highest being RBD palm olein (RBD PL) and crude palm oil (CPO) due to the significant decline in the imports from India.
Chart 1: Breakdown of MPO Exports (MT)
Table 3: MPO Exports to India by Type of Products
| TYPE OF PRODUCTS | Jan-May 2020 | Jan-May 2019 | Diff (Vol) | Diff (%) |
|---|---|---|---|---|
| RBD PL | 4,681 | 1,312,681 | (1,308,000) | (99.6) |
| CPO | 110,926 | 710,115 | (599,189) | (84.4) |
| CPS | 2,496 | 44,616 | (42,121) | (94.4) |
| PFAD | 22,628 | 33,516 | (10,888) | (32.5) |
| CPL | 3,997 | 30,368 | (26,370) | (86.8) |
| PAO | 5,395 | 20,919 | (15,523) | (74.2) |
| OTHERS | 983 | 9,388 | (8,406) | (89.5) |
| TOTAL | 151,106 | 2,161,603 | (2,010,497) | (93.0) |
Source : MPOB
As stated previously, the main contributing factor of the declining exports of Malaysian palm oil to India is due to the restriction on refined palm oil import that has been imposed by the Government of India (GOI). This restriction was widely believed to be implemented as a result of the political conflict between the two countries. During Jan-May 2020 period, MPO export to India was recorded at a mere 151,106 MT from 2,161,603 MT, a staggering decrease of 93.0% or 2,010,497 MT as compared to the same period a year ago. The decline in the imports of palm products has directly benefitted other soft oils which have seen increases in imports during this period. It has been reported that the market share for sunflower oil has increased by 10% to 1.18 million MT and soybean oil increased by 6% to 1.25 million MT during this period.
Besides geo-political factors, imports of palm oil have also been influenced by Covid-19 related factors. It has been observed that there is a shift in demand pattern from HORECA to home consumption, where soft oils are being favoured as cooking oils. Additionally, the price parities between processed palm oil and soft oils have narrowed in favour of the soft oils which makes purchasing of soft oils more attractive.
Table 4: MPO Exports to Pakistan by Type of Products
| TYPE OF PRODUCTS | Jan-May 2020 | Jan-May 2019 | Diff (Vol) | Diff (%) |
|---|---|---|---|---|
| RBD PL | 320,718 | 165,578 | 155,141 | 93.7 |
| CPO | 25,000 | 118,829 | (93,830) | (79.0) |
| CO / DPL | 48,443 | 78,912 | (30,469) | (38.6) |
| RBD PO | 38,397 | 52,836 | (14,440) | (27.3) |
| PAO | 6,066 | 11,252 | (5,186) | (46.1) |
| OTHERS | 5,291 | 8,200 | (2,909) | (35.5) |
| TOTAL | 443,914 | 435,607 | 8,307 | 1.9 |
Source : MPOB
Malaysian palm oil exports to Pakistan also increased slightly to 443,914 MT during Jan-May 2020 from 435,607 MT registered during the same period a year ago. The data from MPOB shows that CPO exports to Pakistan has declined by 79.0%, which is mainly due to the application of CPO export duty both in Malaysia and Indonesia. The volume of import has shifted to RBD palm olein which is registering an increase of 93.7%. Malaysian suppliers have reportedly been able to offer competitive prices in the market and as a result, the volumes from Malaysia have improved.
For more info please contact Mrs Azriyah
Email : azriyah@mpoc.org.my
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