Malaysia will benefit from reduced exports from Indonesia

19-Oct-2024 01:17 PM

Singapore. The use of palm oil in Indonesia's domestic sector is continuously increasing, while there is a possibility of further increase in it.

It is also being consumed well for food purposes there, while during the current year, there is a possibility of a decline of 2 lakh tonnes in the production of palm oil. As a result, the exportable stock of palm oil will decrease and Malaysia can get the benefit of less shipment.

It is worth mentioning that Indonesia is the largest producer and exporter of palm oil in the world, while Malaysia is at number two.

At present, Indonesia has a rule of mandatory use of 35 percent palm oil in the manufacture of biodiesel, while next year its level is likely to be increased to 40 percent. Due to this, a large part of the palm oil produced in Indonesia is being used in the manufacture of biodiesel and hence less stock will be left for export abroad.

Major importing countries are now showing more interest in buying Malaysian palm oil, due to which the prices have started rising in Malaysia.

The more complex the situation of supply and availability of palm oil in Indonesia, the more Malaysia will benefit.

This may give Malaysia an opportunity to increase the production, export and price of palm oil. But it will be interesting to see how the production of palm oil is increased in Malaysia because the regulatory body of the European Union has a special focus on this.

At present, the maximum import of palm oil in India is from Indonesia, while Malaysia is at second and Thailand is at third place.