Palm oil market to remain positive with strong demand from India, China and EU

KUALA LUMPUR: The Malaysian palm oil market is expected to remain positive in 2024, with strong demand from top export destinations such as India with 17.4 per cent of the share, China (9.1 per cent), and the European Union (7.4 per cent), said Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani.

He said the demand is further supported by the interest in replenishing stocks to ensure food security and the overall viability of business activities.

“The Malaysian Palm Oil Board (MPOB) estimates that crude palm oil (CPO) production will reach 18.75 million tonnes in 2024 versus 18.55 million tonnes in 2023.

“This marginal (production) increase of about one per cent compared to 2023 will be driven by improved labour market conditions and a higher number of oil palm trees maturing,” he said in his keynote address at the 35th Palm and Lauric Oils Price Outlook Conference and Exhibition (POC2024) yesterday.

He said in order to realise the positive estimates for 2024, it is crucial to act swiftly and address key challenges in the industry, namely, managing the negative perceptions against palm oil, the sizable opportunity loss arising from inefficient smallholders, climate change (El Nino) and labour issues.

Johari said that despite challenges, the palm oil industry is presented with many opportunities, and Malaysia has the potential to set the bar and be the gold standard in palm oil for the entire world.

He said that moving forward, the industry and the over 447,000 independent and organised smallholders involved must focus on producing high-quality and high-yielding fresh fruit bunches (FFB) and CPO sustainably.

“Multilateral engagements are vital as they are the only way forward to counter the unfounded allegations and negative perception directed towards palm oil.

“Our Malaysian community of growers, processors, researchers, and traders must be united to fight off the negative perceptions against our industry,” he added.

Meanwhile, Johari also announced that the Malaysian Palm Oil Certification Council (MPOCC) will be renamed as Malaysian Sustainable Palm Oil Certification (MSPO), and this is to eliminate existing confusion between the Malaysian Palm Oil Council (MPOC) and MPOCC.

In 2023, the palm oil market exhibited resilience despite global economic uncertainties, and the industry continues to be an important part of the Malaysian economy, contributing approximately three per cent to gross domestic product growth last year.

Despite the sharp decline in the price of CPO, the export value of palm oil and palm oil products registered over RM100 billion, driven by an increase in volume.

Strong demand from key consuming regions and improved production conditions contributed to the market’s overall performance.