M’sia’s CPO export to gain from sunflower oil supply disruption
KUCHING: Malaysia’s crude palm oil (CPO) export will benefit from the supply disruption of sunflower oil, amid the RussiaUkraine crisis which are also the biggest suppliers of the latter.
In regards to the RussiaUkraine crisis, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) foresees that the price of edibles oil will increase on the back of supply concerns.
“We do note that Ukraine and Russia are the biggest suppliers of sunflower oil and it is also the second most imported edible oil from India, after palm oil,” MIDF Research said.
“Hence, this is positive to our CPO export as we think that the supply disruption of sunflower oil will eventually lead to higher demand of palm oil from India, which is also our top buyer.
“To note, aside from soybean oil, sunflower oil is also correlated with palm oil as these edible oils can be used as each other’s substitute in the food manufacturing industry.”
In-line with the supply disruption of sunflower oil, the research arm also expects better export demand from other countries as well given that the sunflower oil comes in third position on most traded vegetable oils – after palm oil and soybean oil.
“As for export front, we expect that Russia-Ukraine crisis will not have any severe negative impact on Malaysia palm oil and will continue to maintain its healthy export demand given that our top buyers are from India and China.
“On top of that, Ukraine and Russia only accounted for 0.3 per cent and 0.1 per cent of Malaysia’s palm exports respectively.”