Malaysian Palm Oil Exports Performance to China
A Review on MPO Export Performance
For the period from January-November 2021, Malaysia’s palm oil exports to China (including HK) declined by 855,282 MT or by 33% to 1,737,973 MT. This were due to increase of market share by Indonesia in November (~66%). According to Oil world, import of palm oil month-over-month (MoM) from Indonesia into China hiked about 31% in Nov while from Malaysia dropped 17%. The lower palm oil import from Malaysia is mainly due to the more competitively priced refined palm oil from Indonesia.
Table 1. Malaysia PO import to China (including HK) Jan-Nov 2021 vs 2020
|Jan-Nov 2021||Jan-Nov 2020||Difference (MT)||Change (%)|
RBD Palm Olein, RBD Palm Stearin, and Crude Palm stearin, the main palm oil products exported to China market, accounting for 94% of the total exports (Chart 1.).
The Covid19 pandemic also had an impact on import of palm oil by and overall Malaysia PO imports into China registered declines and this is especially so for RBD PL which declined significant by 42%, followed by CPS (-24%) and RBD PS (-14%) as compared to the same period of 2020. Details in Table 2 below.
Table 2. Malaysia palm products export to China/HK (By Products)
|Product||Jan – November 2021||Jan – November 2020||Diff (MT)||Diff (%)|
Indonesia export tax and levy for January 2022 is expected to be remain the same as Dec. 2021 and with this export structure, it is expected that Indonesia will be continue to be price competitive in global export markets particularly for refined palm oils & downstream products. There is however a likelihood that Malaysia’s palm oil exports to China in the coming months may improve as China start to purchase palm oil to stock up for the upcoming festive season but could be curtailed by higher availability of soybean oil. Analysts forecast that the short term bullish palm oil prices could have an effect on China’s palm oil demand. There could be higher demand for soybean meal by the livestock industry which would mean higher soybean crushing, hence more SBO will be available to the market. (Source: UOB Palm oil market update, dated 15 Dec 2021).
On an annual basis, we anticipate China’s total palm oil import to be stronger for the coming year, as in need to replenish stocks to meet basic PO demand which is unlikely to be replaced by import of soft oil.
Chart 2. 2021 vs 2020: Total import of Malaysian PO to China on month-over-month basis
(Source: Oil world Flash, dated 22 Dec 2021)
(Source: UOB Seminar on Palm oil market update, dated 15th Dec 2021)
(Source: Oil world & MPOB)
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