Malaysian Palm Oil Exports Performance to Sub-Saharan Africa Region
(Jan – Aug 2021)
A Review on MPO Export Performance
Table 1: Top Importers of Malaysian Palm Oil from Sub-Saharan Africa
|Country||Jan – Aug|
|Jan – Aug 2020||Difference (Volume)||Difference|
|Congo, Dem Rep. Of||18,653||25,402||(6,749)||(26.57)||47,035|
Source : MPOB
Imports of Malaysian palm oil by countries in the Sub-Saharan region in the Jan-August 2021 period have reduced from 1,696,172 MT to 1,386,903 MT or by 18.23% compared to the same period of last year. In terms of product breakdown, CPO/CPL is the only product that registered an increase from 862,875 MT to 901,885 MT during that period. Despite the rise in CPO prices in the international market this year, Malaysian CPO/CPL price is still competitive compared to Indonesian crude palm oil or any other vegetable oils.
Kenya was the biggest importer of MPO from the region and the only country that shows positive growth, with an import volume of 362,568 MT, up by 48.83% from 243,610 MT imported a year earlier. The strong surge in MPO imports in Kenya can be attributed to an increase in demand for CPO by the local refineries in Kenya and neighbouring Tanzania and other land-locked countries such as Uganda, Rwanda, Burundi, and the Democratic Republic of Congo.
The other countries in the region so far have imported less Malaysian palm oil, especially those countries which normally imported large volumes of RBD palm olein such as Benin, Tanzania, South Africa, and Togo. The drop in MPO imports can be attributed mainly to higher export prices of RBD palm olein in Jan-August 2021 period compared to the last year’s prices. The current pandemic situation has made the cost of freight even higher, therefore increase the cost of imports.
Competition from other palm oil exporting countries and locally produced palm oil also contribute to the lowering imports of Malaysian palm oil by the countries in the region. The recent revision in Indonesian export taxes and levies which made Indonesian refined palm oil more competitive also contributed to the drop in Malaysian palm oil exports to the region especially for processed palm oil. According to limited information made available by Oil World, Indonesian palm oil exports to a few countries in the region such as Benin, South Africa, and Togo have increased compared to last year’s IPO imports.
Based on reports from various sources, local palm oil production in West African countries, namely Nigeria, Ghana, Cote D’Ivoire, and Sierra Leone has increased in the past few months resulting in less reliance on imports. This situation partly contributed to the lower imports of Malaysian palm oil from Nigeria, Ghana, and the Ivory Coast.
For countries that rely on cross-frontier trade, such as Togo and Benin, land border closures have had a deep impact on their economy, hence lower imports of Malaysian palm oil so far this year. Malaysian palm oil imports by Togo and Benin have dropped by 39.25 % and 59.56% respectively. As the country’s borders remain closed, business and exports are blocked between several of their neighbours in the region, such as states like Nigeria, Ghana, Burkina Faso, Mali, and Niger.
Figure 1: Monthly Exports of MPO to Sub-Saharan Africa (MT), 2019-2021
The month of July 2021 saw a reductions of 67,545 MT in MPO imports from 235,774 MT a month earlier to just 168,229 MT. If compared to August 2020 imports volume of 292,724 MT, this would represent 42.5% drop. If the import pattern follows last year’s trend as depicted in Figure 1 above, imports of MPO by the region in final remaining months of the year would be stronger than the earlier months. However high CPO price and the economic impact of Covid-19 shock SSA could be major deterrents that would affect the volume of MPO shipment to the region.
Figure 2: Breakdown of MPO Exports (%) to SSA, Jan-Aug 2021
Source : MPOB
Crude palm oil/olein and RBD palm olein are 2 majors MPO palm oil products exported into the region with each product made up of about 65.0% and 20.21% respectively. CPO/CPL imports have increased by 4.52% to reach 901,885 MT compared to 862,875 MT during the same period last year. The top four buyers of Malaysian CPO/CPL are Kenya (331,194 MT), Nigeria (181,265 MT), Mozambique (127,390 MT), and Ghana (114,411 MT). On the other hand, RBD palm olein exports have reduced by 52.58% to 280,304 MT from 591,145 MT registered during Jan-Aug 2020. Major importers of RBD palm olein from the region include Tanzania (70,540 MT), Angola (35,278 MT), and South Africa (34,601 MT).
Table 2: Breakdown of MPO Exports Products to Sub-Saharan Africa (MT)
|Diff (MT)||Diff (%)||Jan-Dec 2020|
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