Palm oil export to exceed RM70b in 2020

by SHAHEERA AZNAM SHAH / pic by RAZAK GHAZALI

MALAYSIA’S palm oil total export value is expected to surpass RM70 billion in 2020 as palm oil importing-countries are stocking up their inventories due to plunging demand.

Plantation Industries and Commodities Ministry (MPIC) secretary general Datuk Ravi Muthayah said the country’s export earnings recorded RM52 billion as of September 2020, a higher contribution than 2019 due to the strong crude palm oil (CPO) prices.

Ravi said palm oil has been Malaysia’s single-largest commodity earner, contributing about 3.5% to 3.7% to the country’s GDP in the third quarter of last year, given the current six million hectares.

“Palm oil and palm oil products are expected to contribute more than RM70 billion in 2020 with an export volume of 17.7 million tonnes compared to RM67.5 billion in 2019.

“Although Malaysia is affected by the global lockdown due to the pandemic, palm oil production was not significantly affected,” he said at the virtual Palm Oil Trade Fair and Seminar (POTS Digital) 2021 yesterday.

Due to the seasonal weather pattern and labour shortage at plantations, Ravi said Malaysia is expected to record slightly lower oil output in 2020, at 19.5 million tonnes compared to 22 million tonnes in 2019.

As of September 2020, about 80% of palm oil produced in Malaysia was exported, of which 13% of the volume was CPO, 46% processed palm oil and 40% were other palm oil-based products including oleochemicals.

MPIC Minister Datuk Dr Mohd Khairuddin Aman Razali said the palm oil industry should be protected due to its contribution to the economy.

“The industry has contributed so much in terms of export earnings, employment, research and development, innovation, and especially the smallholders and farmers’ social-economic status.

“However, like many other countries, Malaysia was not spared from the effects of the global pandemic.

“The lockdowns imposed across the country made it clear that there was an urgent need to find new solutions as old solutions were no longer viable in the new environment and changes needed to be made,” he said.

Mohd Khairuddin said the government has since implemented policies to tackle issues that may impact the industry’s development.

“In circumventing palm oil demand disruption, the government has provided incentives such as the suspension of export duty on crude palm oil since June 2020.

“We have seen positive results from this action which is reflected in our palm oil exports increasing significantly from June onwards,” he said.

Malaysia has been promoting sustainable oil palm cultivation by enforcing the Malaysian Sustainable Palm Oil certification scheme and developing sustainable green technology, he added.

Mohd Khairuddin also believed that the industry will see an increasing demand for palm oil and other types of oils this year in line with the global economic recovery.

“The global demand for oils and fats is likely to recover in 2021 as many countries are expected to kick-start their economies which will form an urgent and continuous need to feed demand, especially for food products.

“Although the 2021 global economy is expected to recover albeit at a slower pace compared to previous years, it should not dampen global oils and fats consumption,” he said.

As the most competitively priced edible oil, palm oil is anticipated to cater to the need by providing an affordable option for the coming years, Mohd Khairuddin said.