US Food Industry Trends in 2020

United States maintained its status as Malaysia’s top export destination to the Americas region. Malaysia’s palm oil export to the US in Jan-March 2020 amounted to 162,348 MT, increasing by 16,205 MT or by 11% compared to the same period in 2019. US ranks as the fifth largest export destination for Malaysian palm oil during the first quarter period.  RBD palm stearin was the main product imported by this region followed by RBD palm olein and RBD palm oil, mainly used by the food industries.

No. Country Jan – Mar 2020 Jan – Mar 2019 Diff (MT) Diff (%)
1. China 481,652 571,253 (89,601) (15.68)
2. Netherlands 304,678 233,338 71,340 30.57
3. Pakistan 284,776 288,412 (3,636) (1.26)
4. Philippines 184,982 158,629 26,353 16.61
5. USA 162,348 146,143 16,205 11.09
Source: MPOB

Opportunities for palm oil exist in US food manufacturing sectors. Demographic growth and changing lifestyles offer a wide range of opportunities to food processing industry to enter the US market. According to USDA, food accounted for 12.9% of American household expenditures in 2018. With that, food ranked third behind housing (32.8%) and transportation (15.9%) in the average American household 2018 expenditures. Competitive pricings and versatile applications are among the factors driving palm oil use in US food production.

Preventive measures undertaken by US in slowing down the spreading of coronavirus may affect palm oil consumptions and imports in the second quarter of 2020. Current preventive measures put in place by Trump administration and various state governments which include travel restrictions, social distancing and stay-at-home orders have affected the food industry, causing decline in demand for restaurants and hotels. USDA reported that a study from Womply (a private consulting firm) data on credit card transactions from local businesses nationwide showed that restaurant sales on April 1 were about 50% lower than in the previous year.

However, USDA also reported that it is still unclear how food consumption patterns will change throughout this critical time. This is because consumer demand are now shifting towards online shopping due to the ongoing restrictions on movement. According to the Food Industry Association (FMI), many shoppers are doing shopping online for grocery-type items in the month of March 2020. The number is more than twice the proportion of monthly online shoppers from FMI’s US Grocery Shoppers Trends research one year ago (USDA).

Last month, US Senate approved a $2 trillion stimulus package designed to jump-start the economy reeling from the coronavirus pandemic. The package will provide a huge financial aid into the ailing economy and support those affected by the closures and disruption of daily activity by COVID-19 which also disrupted the demand and supply of oils and fats in the US. According to recent media reports, there are positive signs pointing to the flattening of the curve in the coronavirus spread in US. The aggressive preventive measures put in place by various states is showing positive results, giving hope to the road of slow recovery.

Sources :

  1. MPOB
  2. USDA. https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=58276
  3. USDA. https://www.usda.gov/media/blog/2020/04/16/will-covid-19-threaten-availability-and-affordability-our-food
  4. InvestinUSA. http://www.invest-in-usa.org/industries/3/food-processing

Prepared by  Nur Adibah and Zainuddin Hassan

*Disclaimer: This document has been prepared based on information from sources believed to be reliable but we do not make any representations as to its accuracy. This document is for information only and opinion expressed may be subject to change without notice and we will not accept any responsibility and shall not be held responsible for any loss or damage arising from or in respect of any use or misuse or reliance on the contents. We reserve our right to delete or edit any information on this site at any time at our absolute discretion without giving any prior notice.

You can share this posts: