|COVID–19 NEWS||S Korea’s new COVID-19 cases bounce back to over 10,000 amid resurgence woes | Italy's COVID-19 transmission rate rises for 4th consecutive week | N Korea's first COVID-19 cases traced to area bordering S Korea: State media | COVID: Rise in new infections, drop in death cases last week - Health DG | South Korea’s COVID-19 vaccine candidate inches closer to launch after experts' approval Recommendation ||
KUALA LUMPUR, May 22 (Bernama) -- The Ministry of Plantation Industries and Commodities (MPIC) said that Indonesia’s move to lift the ban on palm oil exports, effective May 23, 2022, will see a knee-jerk correction in palm oil price but not a big downward adjustment as the market is well aware that the ban was temporary.
Minister Datuk Zuraida Kamaruddin, in a statement today, urged all Malaysian oil palm growers -- both plantation firms and smallholders alike -- not to be unduly concerned with the recent development.
Moreover, the recent weakening of crude palm oil (CPO) prices could have already factored in this possibility.
“Market analysts expect Malaysian planters to be the largest winners in the long run as they are able to sell their CPO at high spot prices which should translate into higher profit margin in the second quarter of 2022, coupled with higher production year-on-year (y-o-y) and quarter-on-quarter (q-o-q),” she said.
“While the export ban lifting is a big relief to Indonesian planters, they have certainly missed out on the high CPO price period (February-April 2022) when Indonesia's palm oil prices were trading at a larger discount to Malaysia with all the export control policies put in place since late-January 2022.”
Indonesia’s policies could well work to Malaysia’s advantage
Zuraida said Indonesia’s policies could well work to Malaysia’s advantage as the world’s second largest palm oil producer, given this would enable it to emerge as a dominant supplier to India which is the world’s top buyer of the edible oil.
The combination of Malaysia’s lower export taxes and the Indonesian ban may mean Indonesia’s share of palm oil exports to India will fall to 35 per cent in the current marketing year ending Oct 31, 2022, from more than 75 per cent a decade ago, according to an estimate from the Solvent Extractors' Association of India (SEA), a vegetable oil trade body.
In the first five months of the 2021/22 marketing year, India bought 1.47 million tonnes of Malaysian palm oil compared to 982,123 tonnes from Indonesia, data compiled by SEA indicate.
Trader estimates for May show India imported around 570,000 tonnes of palm oil with 290,000 from Malaysia and 240,000 from Indonesia, Zuraida said.
“Above all else, MPIC believes that CPO prices will remain at elevated levels going forward, given the output uncertainties on major oilseeds (such as soybean, corn, rapeseed and sunflower seed) either due to geopolitical tensions or unfavourable weather.”
Lastly, even as Indonesia would resume its palm oil exports on May 23 (Monday) -- barely a month after imposing the ban on April 28 -- it may not end there, given palm oil prices in its domestic market have yet to come down to the desired level (in fact, lifting of the ban could result in a recurrence of domestic shortage in the country).
Given that the medium- to long-term outlook of the Malaysian palm oil industry remains bright, MPIC calls on all Malaysian oil palm growers to join hands in helping to make the Malaysian Palm Oil Full of Goodness campaign, which seeks to counter various misperceptions with regard to Malaysian palm oil, a global success.
Bernama is the trusted source of reliable real-time comprehensive and accurate news for both the public and media practitioners. Our news is published at www.bernama.com ; BERNAMA TV on: Astro Channel 502, unifi TV Channel 631, MYTV Channel 121 IFLIX; and Bernama Radio broadcasting locally on FM93.9 in Klang Valley, Johor (FM107.5), Kota Kinabalu (FM107.9) and Kuching (FM100.9).
Follow us on social media :
Facebook : @bernamaofficial, @bernamatv, @bernamaradio
Twitter : @bernama.com, @BernamaTV, @bernamaradio
Instagram : @bernamaofficial, @bernamatvofficial, @bernamaradioofficial
TikTok : @bernamaofficial