MPOC upbeat on palm oil export prospects for 2021

KUALA LUMPUR: Malaysia’s crude palm oil ( CPO) exports are expected to improve by 12.5 per cent this year to 4.5 million tonnes from an estimated 3.67 million tonnes in 2020, the Malaysian Palm Oil Council (MPOC) said.

Chief executive officer Datuk Dr Kalyana Sundram said CPO prices are set to stay above the RM3,000 per tonne level amid concerns of supply limitations due to the monsoon season.

“We forecast the average CPO price to be at RM3,650 per tonne for the first quarter of 2021, ranging from a low of RM3,500 per tonne to a high of RM3,850 per tonne,” he said during the virtual Malaysian Palm Oil Trade Fair and Seminar (POTS Digital 2021).

As for the country’s CPO production, he said it is estimated to improve slightly to 19.6 million tonnes this year versus 19.4 million tonnes in 2020.

Kalyana said India, the Netherlands, and Kenya are expected to be the top three export destinations for Malaysian CPO this year, and exports to India are forecast to increase to 2.55 million tonnes against 2.04 million tonnes recorded last year.

He noted that January 2021 delivery price for CPO has already exceeded RM3,800 per tonne, and despite the reinstatement of CPO export duties, prices are expected to remain firm on concerns of supply limitations due to the heavy rainfall in January and February impacting production.

Malaysia has set the export tax for CPO at eight per cent this month, marking the end of the zero export tax enjoyed from June to December last year, which was intended to raise the value of Malaysian palm exports to other countries, especially India.

Meanwhile, a V-shaped growth recovery in 2021 is projected for Malaysia’s CPO, and Kalyana believes that the Asia-Pacific region will be the primary driver of palm oil demand.

Demand is also expected to come from the Middle East and North Africa (MENA), South Asia and Uzbekistan, Sub-Saharan Africa, European Union and Eastern Europe regions, he said.

Regarding exports to China, Kalyana said China’s positive economic improvement -- with an estimated 8.2 per cent Gross Domestic Product (GDP) growth this year -- will only lead to increasing per capita income and drive up palm oil demand, especially for bakery and confectionery fats in China.

On MENA, he said the higher intake of palm oil in the food processing industry and the growth of the HoReCa (hotel/ restaurant/cafe) sector to cater to tourism industry needs in Turkey, Egypt and Saudi Arabia would create more opportunities for palm oil exports.

Kalyana also said the Regional Comprehensive Economic Partnership signed in November 2020 will boost business and trade ties between Asean countries, Australia, China, Japan, South Korea and New Zealand.

“An increasing consumer shift in Vietnam towards a more health-conscious diet will continue to encourage the switch from animal fats to vegetable oil and this is especially benefiting palm oil,” he said. — Bernama