Sub Continent (Jan – July) 2021

Malaysian Palm Oil Export to Sub Continent Region
(Jan – July 2021)
A Review on MPO Export Performance

Table 1: A Review on MPO Export Performance (MT)

Diff (Vol)Diff (%)
5.Sri Lanka43,85590,771(46,916)(51.7)
 Grand Total2,361,8731,938,385423,48821.8

   Source: MPOB

During Jan-July 2021 period, MPO exports to the sub-continent region registered a total of 2,361,873 MT against 1,938,385 MT which was registered during the same period of last year.

MPO exports to India during Jan-July 2021 period recorded a jump of 112.8% from just 846,448 MT to 1,801,207 MT. Malaysia exported 1,614,612 MT of CPO during Jan-July 2021, an increase from 842,988 MT during the same corresponding period last year. This could be attributed to Indonesia’s latest palm oil export tax revision. The revised export tax has seen the prices of processed palm oil originating from Indonesia becoming more competitive compared to from Malaysia. As a result, major CPO consuming countries including India turning to Malaysia for CPO supplies. At the same time, Indonesia is still pursuing its B30 and B40 biodiesel mandate and will likely consume more CPO in order to achieve its target. The expected limited supply of CPO from Indonesia has inevitably created the demand for Malaysian CPO. Also, during the same period last year, MPO exports were affected by geo-political factors which fortunately are no longer relevant. The restrictions on refined oils were imposed at this time last year which saw a halt on the Malaysian refined palm oil into India. During Jan-July 2021, exports of Malaysian RBD palm olein increased from 6,140 MT to 77,367 MT.

Table 2: MPO Exports to India by Type of Products (MT)

TYPE OF PRODUCTSJan-July 2021Jan-July 2020Diff (Vol)Diff (%)
RBD PL77,3676,14071,2271,160.1
RBD PO8,2227557,467989.0
RBD PS3,6277442,883387.5

Source: MPOB

MPO exports to Pakistan during this period decreased significantly by 48.3% from 691,495 MT to only 357,363 MT. The exports of Malaysian palm oil in bulk have shown a decreasing trend from the start of 2021. The decline in the Malaysian palm oil exports during Jan-July 2021 is attributed to several factors including higher than usual discount on refined palm oil fractions from Indonesia, low supply of CPO from Malaysia and aggressive selling attitude of Indonesian suppliers. Currently, there are approximately 8 suppliers who are offering regular palm oil cargo from Indonesia as compared to only two Malaysian companies.

Table 3: MPO Exports to Pakistan by Type of Products (MT)

TYPE OF PRODUCTSJan-July 2021Jan-July 2020Diff (Vol)Diff (%)
CO / DPL106,78979,26527,52434.7
RBD PL184,066458,127(274,061)(59.8)
RBD PO20,73071,483(50,753)(71.0)

Source: MPOB

MPO exports to Bangladesh during Jan-July 2021 have also reduced greatly when only 70,151 MT recorded compared to 215,930 MT during the same corresponding period of last year. The Covid-19 pandemic has greatly affected the demand of palm oil in the HoReCa sector and this has also impacted the palm oil intake into the country including from Malaysia. Most importantly, MPO prices were more competitive as compared to IPO especially in the months of Mar-May and Aug-Oct 2020. MPO price is reportedly no longer competitive this year and Indonesian companies are said to be able to offer an average of USD 15-20 per tonne discount to the Bangladeshi buyers in the last 3 months.

Table 4: MPO Exports to Bangladesh by Type of Products (MT)

TYPE OF PRODUCTSJan-July 2021Jan-July 2020Diff (Vol)Diff (%)
RBD PL65,149195,985(130,837)(66.8)
RBD PO4729,029(8,556)(94.8)
CO / DPL2192,596(2,377)(91.6)
RBD PS1,4672,056(589)(28.6)

Source: MPOB

MPO exports to the CAR countries are also affected and this is mainly due to the countries still recovering from the Covid-19 pandemic impact on the countries’ economies.

In Uzbekistan, MPO exports registered a total of 3,935 MT during Jan-July 2021 from 26,034 MT recorded during the same period last year, which is a decline of 22,100 MT or 84.9%. This is mainly due to the revised duty structure on the imports of oils and fats and all fractions of palm oil which are now subjected to 5% duty besides other applicable taxes if imported from Most Favoured Nations (MFN) countries including Malaysia. The countries in the CIS region are still enjoying zero duty on the import of palm oil. As a result of the new duty structure, MPO exports to Uzbekistan during this period have greatly reduced.

During this period, Sri Lanka imported a total of 43,855 MT of MPO and its products, which is 51.7.4% lower compared to the same period of 2020. The lower import volume could be attributed to the palm import ban after palm oil fractions were put under controlled list since April 2021.

Table 5: Breakdown of MPO Exports (MT)

Diff (Vol)Diff (%)
RBD PL344,704684,381(339,676)(49.6)
CO / DPL176,655133,05443,60032.8
RBD PO36,771108,879(72,108)(66.2)
RBD PS   10,323 12,043     (1,719)(14.3)
HPO 7094,141     (3,432)(82.9)
Others      23,311     10,867 12,444  114.5
TOTAL 2,361,873 1,938,385 423,488 21.8

Source: MPOB

Chart 1: Breakdown of MPO Exports (MT)

Source: MPOB

In terms of breakdown, the biggest product being exported to the region during Jan-July 2021 period is crude palm oil (CPO) accounting for 70% of total exports. After CPO, RBD palm olein is another major palm oil product exported into the Sub-Continent region, accounting for 15% of total exports. These two palm oil products accounted for 85% of the total MPO exports to this region.

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