Malaysia and China recently signed an MoU, under which Malaysia will provide an additional supply of a minimum of 1.9 million tonnes of palm oil to China over a five-year period, starting from 2019. The palm oil volume is estimated at RM4.56 billion based on an average price of US$600 per tonne.
The new deal is expected to increase Malaysia’s palm oil exports to China by additional 20% or about 400,000 tonnes per annum. Malaysia’s local palm oil exports to China stood at 1.86 million tonnes in 2018 (its third largest export market) which is slated to increase by about 2.26 million tonnes in 2019.
In 2018, India was the largest consumer of Malaysia’s palm oil at 2.51 million tonnes, followed by EU at 1.91 million tonnes. Malaysia also exported substantial amount of palm oil to Pakistan, the Philippines, Turkey and the US.
According to some analysts, the additional purchase of Malaysian palm oil by China (although a positive sign) is not likely to ease the bloating in global palm oil stocks situation (Malaysia and Indonesia). It is also not expected to help boost CPO prices higher.
At CMT’s 11th Asia Sustainable Oil Palm Summit in Jakarta on 12-13 Sept, 2019, find out more about ‘Positioning of CPO vs Other Edible Oils – Implications of Current Political Trends, Soybean Trade and Sustainability’ from Oscar Tjakra, Executive Director, RaboResearch Food & Agribusiness.
Contact Ms. Hafizah at
hafizah@cmtsp.com.sg or call +65 6346 9218 for more details about this event.
