Malaysian palm oil exports declined by 13 percent to 11.68 lakh tonnes
10-Feb-2025 12:43 PM
The decline in Malaysian palm oil exports by 13% to 11.68 lakh tonnes in January 2025 is a result of a combination of factors:
High Prices: The cost of palm oil is relatively high compared to other oils like soybean, sunflower, and rapeseed-canola oil. This price difference has caused reduced demand, especially from major importers like India and China.
Biodiesel Demand: Indonesia's substantial demand for palm oil to produce biodiesel is contributing to the higher prices, as it competes for the same supply.
Weather Disruptions: The severe rains and floods in Malaysia during November-December 2024 led to flooding of palm plantations. This significantly disrupted the crushing and processing of palm oil through January, resulting in lower production. In January, crude palm oil (CPO) production dropped by 16.8%, affecting the supply.
Stock Decrease: Malaysia's palm oil stock declined by 7.55% in January compared to December, indicating the reduced availability of palm oil in the country. The stock of crude palm oil decreased by 11.78%, while processed palm oil stock dropped by 2.9%. However, the stock of palm kernel oil increased by 2.82%.
Weak Demand from Top Importers: Countries like India and China showed weaker demand for Malaysian palm oil, with India importing significantly less due to high prices. The Lunar New Year holiday in China also partially disrupted palm oil imports during this period.
Rise in Domestic Imports: Interestingly, Malaysia's own imports of palm oil increased by 133.34% in January compared to December, reaching 88,474 tonnes. This could be linked to domestic needs or potential stockpiling activities within Malaysia itself.
These factors combined have created a challenging environment for the Malaysian palm oil industry in the short term, impacting both production and exports.