Sub-Saharan Africa seen as next destination for Malaysian palm oil export growth

KUALA LUMPUR (Sept 24): A continent with a population of over 1.3 billion, which is expected to increase to 2.5 billion by 2050, Africa offers bright prospects for Malaysian palm oil, with demand to come from industries such as food, cosmetics and pharmaceuticals, palm oil experts opined.

“Malaysia’s position as a leading supplier of sustainable and quality oil products must be exploited to the fullest, and there are ample opportunities for growth for palm oil supply in sub-Saharan Africa (SSA), particularly Southern Africa,” said Dawie Theron, Sime Darby Oils South Africa’s senior trading manager.

Theron was one of the panellists of the “Sub-Saharan Africa — The Next Frontier for Malaysian Palm Oil?” webinar yesterday, hosted by the Malaysian Palm Oil Council (MPOC).

“Southern Africa is typically following European standards when it comes to food quality and safety. As such, the current sustainability and responsible sourcing requirements in Europe will hit the Southern African market in the very near future. 

“We will very soon see that price over quality and sustainability will be replaced by quality and sustainability above all,” he said.

Theron also noted that global brands like Nestle, Aspen, Ferrero Rocher and Unilever are already demanding for quality and sustainability aspects for goods to be used to manufacture their products in Southern Africa.

Having said that, he said Sime Darby Oils South Africa had just completed a new project and will be bringing in No Deforestation, No Peat and No Exploitation (NDPE) palm stearin out of Malaysia into the South African market.

This would be in addition to the Roundtable on Sustainable Palm Oil (RSPO) SG-certified low glyceride palm olein that Sime Darby Oils South Africa has been sourcing out of Malaysia over the past 18 months.

Theron also said the Malaysian standard for sustainable palm oil production (MSPO) should be promoted and advocated to global brands more effectively.  

“The MPOC also needs to rethink setting up a regional office in Southern Africa. With the assistance and guidance of such an office, we need to start challenging the misperception of palm oil and start pushing and promoting the qualities that make Malaysian palm oil the superior product that it is,” he said.

Another panellist, MPOC marketing executive Nor Iskahar Nordin, said demand from countries like Mozambique, Madagascar, Angola and Mauritania had been increasing.

 “Consumers’ taste and growth in the hotel, restaurant and café (Horeca) sector in these countries are changing, and post Covid-19, we expect a surge in food consumption, hence more demand for palm oil.

“The SSA region is expected to import 2.4 million to 2.5 million tonnes of palm oil this year, and this is expected to increase to 2.6 million to 2.7 million tonnes next year,” he said.

Nor Iskahar also said the deficit of oils and fats in SSA would remain in the near future, and since palm oil is cost-competitive, versatile and nutritious, it will be able to supplement the shortage.

He said Malaysian palm oil exports to SSA in January to August 2020 rose 37% to 1.69 million from 1.23 million recorded for the same period in 2019.

Meanwhile, Fatima Alimohamed, the chief executive officer (CEO) of African Brand Warrior, urged Malaysian palm oil exporters to make Africa as their palm oil investment destination.

 “We have the right land, sea, weather [conditions] and a large labour force, making it the perfect destination for Malaysian oil palm investment.

“It’s no rocket science for us … after all, the crop did come from Africa, so now it is back to where it belongs,” she said.

Fatima also said companies should invest in training and collaborations for development with existing or upcoming plantations.

She noted that some of the current challenges faced by the continent include the lack of automation in the palm sector compared to Asia, adding that there is also a need to move towards self-sufficiency in Africa.

Source : The Edge Markets

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