Malaysian Palm Oil Export to Sub Continent Region
(Jan – Feb 2020)
A Review on MPO Export Performance
During Jan-Feb 2020, Malaysian palm oil export to the Sub-Continent region registered a total of 380,090 MT, a decrease of 593,110 MT or 60.9% from 973,200 MT which was registered during the same period of 2019 as shown in Table 1. Continuous declining export to India has contributed to the decrease in the overall MPO exports to this region.
Table 1: A Review on MPO Export Performance (MT)
| No. | Country | Jan-Feb 2020 | Jan-Feb 2019 | Diff (Vol) | Diff (%) |
|---|---|---|---|---|---|
| 1. | Pakistan | 217,712 | 158,413 | 59,299 | 37.4 |
| 2. | India | 68,006 | 767,338 | (699,332) | (91.1) |
| 3. | Sri Lanka | 50,185 | 20,127 | 30,058 | 149.3 |
| 4. | Bangladesh | 22,790 | 1,743 | 21,047 | 1,207.5 |
| 5. | Afghanistan | 12,102 | 11,096 | 1,006 | 9.1 |
| 6. | Kazakhstan | 3,091 | 7,919 | (4,828) | (61.0) |
| 7. | Nepal | 1,013 | 1,184 | (171) | (14.4) |
| 8. | Turkmenistan | 531 | 461 | 70 | 15.2 |
| 9. | Uzbekistan | 3,682 | 3,485 | 197 | 5.7 |
| 10. | Maldives | 892 | 1,351 | (459) | (34.0) |
| 11. | Kyrgyzstan | 86 | 83 | 3 | 3.6 |
| 12. | Tajikistan | 0 | 0 | 0 | 0.0 |
| 13. | Bhutan | 0 | 0 | 0 | 0.0 |
| Grand Total | 380,090 | 973,200 | (593,110) | (60.9) |
Significant uptake of MPO export to Bangladesh continues as an increase of 21,047 MT or by 1,207.5% is recorded. MPO exports to Sri Lanka also continue to rise by 149.3% or 30,058 MT. The import pattern of palm oil in Bangladesh has been on the upward trend since November 2019 and looks set to continue for the next few months due to the upcoming Ramadan month. Demand for palm oil picks up one or two months ahead of Ramadan as importers stock up on the commodity in anticipation of increased demand to prepare food for the festivities. Ramadan is scheduled to start on 23-24 April 2020.
Large palm oil import from Malaysia to Sri Lanka could be due to the current restriction on MPO into India and hence the exports have been diverted to Sri Lanka. For Jan-Feb 2020, Sri Lanka has reportedly imported a total of 22,790 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-Feb 2020 | Jan-Feb 2019 | Diff (Vol) | Diff (%) |
|---|---|---|---|---|
| RBD PL | 206,144 | 545,685 | (339,541) | (62.2) |
| CPO | 56,077 | 283,963 | (227,886) | (80.3) |
| CO / DPL | 31,300 | 50,045 | (18,744) | (37.5) |
| RBD PO | 13,135 | 11,405 | 1,730 | 15.2 |
| CPS | 2,496 | 8,016 | (5,520) | (68.9) |
| CPL | 48,764 | 24,318 | 24,446 | 100.5 |
| PFAD | 6,319 | 25,286 | (18,967) | (75.0) |
| PAO | 6,121 | 9,550 | (3,428) | (35.9) |
| RBD PS | 2,282 | 5,877 | (3,595) | (61.2) |
| HPO | 1,781 | 480 | 1,300 | 270.8 |
| OTHERS | 5,671 | 8,576 | (2,905) | (33.9) |
| TOTAL | 380,090 | 973,200 | (593,110) | (60.9) |
Chart 1: Breakdown of MPO Exports (MT)
Table 3: MPO Exports to India by Type of Products
| TYPE OF PRODUCTS | Jan-Feb 2020 | Jan-Feb 2019 | Diff (Vol) | Diff (%) |
|---|---|---|---|---|
| RBD PL | 3,933 | 470,065 | (466,132) | (99.2) |
| CPO | 47,427 | 247,670 | (200,243) | (80.9) |
| CPS | 2,496 | 8,016 | (5,520) | (68.9) |
| PFAD | 6,319 | 24,629 | (18,310) | (74.3) |
| CPL | 3,997 | 9,621 | (5,623) | (58.5) |
| PAO | 3,320 | 4,288 | (969) | (22.6) |
| OTHERS | 515 | 3,050 | (2,535) | (83.1) |
| TOTAL | 68,006 | 767,338 | (699,332) | (91.1) |
Source : MPOB
On 8th January 2020, the Ministry of Commerce and Industry of India issued a notification declaring that the import of refined palm oil “is amended from ‘Free’ to ‘Restricted’. The decision to impose the restrictions on imports of palm oil and palm olein is widely believed and reported as retaliation against Malaysia following the Malaysian government stand on certain issues on the Government of India’s internal policies that don’t bode well with the latter.
In this regard, the move to shun palm oil from Malaysia is seen to result in a lower import of palm oil from Malaysia as can be seen from Table 3. The total palm oil imported from Malaysia during Jan-Feb 2020 registered a volume of 68,006 MT, which is 91.1% lower when compared with the same period of 2019.
On 4th March 2020, the GOI has announced that it has no intention of extending the safeguard duty of 5% that expired on the particular date. Even if they extended it, it would not affect Malaysia as Malaysian RBD palm olein could be imported at the lower duty under AIFTA. Besides, if it were to be extended, the GOI departments would have had to undertake several time consuming steps to do so. It is perceived that extension was not done for these reasons.
The non-extension of the safeguard duty is reportedly won’t signify a change in the stance of GOI towards Malaysia. It also does not give away the indication that India is now willing to issue import licenses for refined palm oil products from Malaysia. Hence, at the moment, it does not provide Malaysia any edge over Indonesia. The political position still remains intact. Therefore, Malaysia should continue to address this matter at the G-to-G level until a solution can be obtained to resolve this matter.
Elsewhere, rapeseed output in India, the world’s biggest importer of vegetable oils, is likely to rise 4% this year as favourable weather boosted yields, based on a recent report by a leading trade body. Higher rapeseed output will help India cut back expensive imports of vegetable oil including palm oil.
Table 4: MPO Exports to Pakistan by Type of Products
| TYPE OF PRODUCTS | Jan-Feb 2020 | Jan-Feb 2019 | Diff (Vol) | Diff (%) |
|---|---|---|---|---|
| RBD PL | 182,033 | 68,658 | 113,374 | 165.1 |
| CPO | 5,000 | 33,827 | (28,827) | (85.2) |
| CO / DPL | 15,459 | 38,279 | (22,820) | (59.6) |
| RBD PO | 11,000 | 7,751 | 3,249 | 41.9 |
| PAO | 2,802 | 5,261 | (2,460) | (46.7) |
| OTHERS | 1,419 | 4,636 | (3,217) | (69.4) |
| TOTAL | 217,712 | 158,413 | 59,299 | 37.4 |
Source : MPOB
The imports of Malaysian palm oil to Pakistan during the period of Jan-Feb 2020 continue to be seen as rising contributed by higher intake in the month of January. The total palm oil imported from Malaysia during the first 2 months of the year registered a volume of 217,712 MT, which is 37.4% higher when compared with the same period of 2019. It has been learnt that some ships carrying refined palm oil which were meant for the Indian market have been diverted towards Pakistan due to the restriction of refined oil imports in India. The surge in the palm oil purchase is also contributed by buyers stocking up ahead of the Muslim holy month of Ramadan.
For more info please contact Mrs Azriyah
Email : azriyah@mpoc.org.my
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