Sub Continent (Jan – Nov) 2020

Malaysian Palm Oil Export to Sub Continent Region
(Jan – Nov 2020)
A Review on MPO Export Performance

Table 1: A Review on MPO Export Performance (MT)
No. Country Jan-Nov
2020		 Jan-Nov 2019 Diff (Vol) Diff (%)
1. India 2,178,517 4,270,864 (2,092,347) (49.0)
2. Pakistan 955,881 994,531 (38,650) (3.9)
3. Bangladesh 301,996 150,444 151,552 100.7
4. Sri Lanka 117,091 82,067 35,024 42.7
5. Afghanistan 69,170 64,948 4,222 6.5
6. Uzbekistan 29,657 50,983 (21,326) (41.8)
7. Kazakhstan 14,574 17,943 (3,369) (18.8)
8. Maldives 4,986 5,454 (469) (8.6)
9. Nepal 2,401 5,802 (3,401) (58.6)
10. Turkmenistan 1,358 826 532 64.4
11. Kyrgyzstan 591 1,513 (923) (61.0)
12. Tajikistan 119 244 (125) (51.4)
13. Bhutan 0 0 0 0.0
  Grand Total 3,676,341 5,645,619 (1,969,279) (34.9)

During Jan-Nov 2020 period, MPO exports to the Sub-continent region recorded 3.68 million MT against 5.65 million MT which was registered during the same period of last year (refer to Table 1).

The decline is largely attributed to lower MPO exports by the biggest buyer in the region, India. During Jan-Nov 2020 period, total MPO exports to the country went down to 2.18 million MT from 4.27 million MT recorded during the same period last year (refer to Table 2). The restrictions on the importation of refined palm oil since January this year has greatly impacted the amount of palm oil export from Malaysia going into the country primarily during the first 6 months of 2020.

With the bilateral relationship between the two countries improving, MPO exports started picking up since July 2020 and this is evident as Malaysia started to export more CPO to India as Malaysian companies were reportedly able to offer competitive prices taking advantage of the full exemption from export duties that includes for CPO as announced by the Malaysian Government on 5 June 2020. 

Table 2: MPO Exports to India by Type of Products (MT)
TYPE OF PRODUCTS Jan-Nov
2020		 Jan-Nov
2019		 Diff (Vol) Diff (%)
RBD PL 6,942 2,334,540 (2,327,597) (99.7)
CPO 2,029,601 1,636,106 393,495 24.1
CPS 4,995 123,169 (118,174) (95.9)
PFAD 97,014 99,063 (2,049) (2.1)
CPL 4,984 30,368 (25,384) (83.6)
PAO 9,456 31,396 (21,940) (69.9)
OTHERS 25,524 16,222 9,301 57.3
TOTAL 2,178,517 4,270,864 (2,092,347) (49.0)
Pakistan, another important market for MPO in this region, has been consistently importing palm oil from Malaysia so far in 2020 although MPO exports experienced a slight decrease during Jan-Nov period. Total MPO imports marginally decreased by 3.9% to 955,881 MT during this period from 994,531 MT registered during same period last year (refer to Table 3). Import of RBD palm olein accounted for 25.6% of total imports of MPO by Pakistan. The lower demand particularly from the catering and food industry due to the Covid-19 situation is still the main reason for the slight reduction in palm oil import in the country. This can be seen in the decrease of cooking oil export as a result of shortage of demand from the food and HORECA sector due to the lockdown. These sectors are the main users of palm-based cooking oil. In addition, higher prices and lower availability in the last two months have also contributed to lower palm oil imports. In addition, imports of oilseeds in November also registered an increase, primarily driven by the high imports of soybeans which reportedly registered a growth of 11.51% as compared to the same period last year. Table 3: MPO Exports to Pakistan by Type of Products (MT)
TYPE OF PRODUCTS Jan-Nov 2020 Jan-Nov 2019 Diff (Vol) Diff (%)
RBD PL 565,186 449,886 115,299 25.6
CPO 108,008 199,234 (91,226) (45.8)
CO / DPL 141,938 198,320 (56,382) (28.4)
RBD PO 90,982 99,543 (8,561) (8.6)
PAO 25,994 29,691 (3,697) (12.5)
OTHERS 23,773 17,857 5,916 33.1
TOTAL 955,881 994,531 (38,650) (3.9)
Source : MPOB
Bangladesh continues to record an impressive MPO imports during Jan-Oct 2020 period after registering an increase of 146,480 MT which brings the total to 289,118 MT from only 142,638 MT during the same period last year (refer to Table 4). The price competitiveness of MPO vis-à-vis Indonesian palm oil (IPO) has been the main driver that is contributing to this significant growth. Table 4: MPO Exports to Bangladesh by Type of Products (MT)
TYPE OF PRODUCTS Jan-Nov 2020 Jan-Nov 2019 Diff (Vol) Diff (%)
RBD PL 279,152 78,896 200,256 254
RBD PO 9,069 566 8,503 1,501
CO / DPL 2,671 3,625 (955) (26)
CPL 2,557 19,720 (17,163) (87)
RBD PS 3,003 437 2,567 588
PFAD 2,629 1,795 834 46
OTHERS 2,916 45,405 (42,489) (94)
TOTAL 301,996 150,444 151,552 101
Source : MPOB

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 at least during the first 5 months of 2020. However, it has been reported that MPO has been losing its price competitiveness since June 2020 due to discounted prices which are being offered by competitors, thus shifting the buying preference to more competitively-priced palm oil.

Other country such as Sri Lanka also saw its palm oil imports from Malaysia increased notably. Total MPO exports reached 117,091 MT during Jan-Nov 2020, 42.7% higher compared to the same period last year. The country’s higher edible oils requirements against the backdrop of insufficient domestic production of oils and fats has led to higher palm oil imports. Some of the palm oil is also being re-exported to India as local traders taking advantage on the Free Trade Agreement (FTA) between the two countries that enables Sri Lanka to export their products to India at zero duty.

Among the countries in the Central Asian region, Afghanistan appeared to be the most important MPO buyer up to September this year. MPO exports to this country have increased by 6.5%, registering a total of 69,170 MT during Jan-Oct 2020 period as Afghanistan continues to be relying on edible oils imports to fulfil domestic needs. However, MPO exports to Uzbekistan and Kazakhstan continue to be on decreasing trend registering a drop of 41.8% and 18.8% respectively. The global Covid-19 pandemic is having a negative impact on these countries’ economies that also saw local edible oil consumption took a tumble with the closure of restaurants due to nationwide lockdowns.

Chart 1: Breakdown of MPO Exports (MT)

Source: MPOB

In terms of breakdown, the biggest product being exported to the region during Jan-Nov 2020 period is crude palm oil (CPO) accounting for 58% of total exports. After CPO, RBD palm olein is another major palm oil product exported into the Sub-Continent region, accounting for 24% of total exports. These two palm oil products accounted for 82% of the total MPO exports to this region. Among the major importers of Malaysian CPO are India, Pakistan and Sri Lanka. Major destinations for Malaysian RBD palm olein include Pakistan, Bangladesh and Sri Lanka. Table 5: Breakdown of MPO Exports (MT) 
PRODUCT Jan-Nov 2020 Jan-Nov 2019 Diff (Vol) Diff (%)
RBD PL 890,384 2,897,454 (2,007,069.5) (69.3)
CPO 2,145,013 1,892,102 252,911.2 13.4
CO / DPL 208,827 263,103 (54,276.6) (20.6)
RBD PO 135,862 129,216 6,645.8 5.1
CPS 4,995 123,169 (118,173.7) (95.9)
CPL 96,453 105,955 (9,501.8) (9.0)
PFAD 100,172 101,860 (1,688.3) (1.7)
PAO 35,561 61,252 (25,690.8) (41.9)
RBD PS 27,795 28,913 (1,118.6) (3.9)
HPO 4,700 22,905 (18,205.4) (79.5)
Others 26,578 19,689 6,888.9 35.0
TOTAL 3,676,341 5,645,619 (1,969,278.8) (34.9)
Source: MPOB

For more info please contact Mrs Azriyah Email : azriyah@mpoc.org.my

*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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