MARKET DEVELOPMENT
Malaysia Still Needs To Look For New Outlets For Palm Oil
Malaysia Still Needs To Look For New Outlets For Palm Oil
DUBAI, June 5 (Bernama) -- Malaysia has to consistently look for new outlets for its palm oil while securing its traditional markets by tracking several elements, according to the Malaysian Palm Oil Council (MPOC).
Its chief executive officer Tan Sri Dr Yusof Basiron said that demand for vegetable oils is typically driven by economic growth, especially in developing countries.
The most rapid rate of consumption and import growth is concentrated in several large markets in Asia and the Middle East, Yusof said in outlining the outlook for palm oil this year.
"This is driven by population growth and higher gross domestic product (GDP) growth, which increases purchasing power," he said in the MPOC Annual Report 2006, which was made available to Bernama here.
Yusof also said that consumption is further influenced by cost competitiveness, an area in which palm oil enjoys an advantage.
Last year, the major markets for Malaysian palm oil were China, the European Union (EU), the United States, India, Japan and Bangladesh. Together, they accounted for 65.3 percent or 9.41 million tonnes of the total export value with China topping the list with 3.64 million tonnes or 25.3 percent.
As for the Middle East, although Malaysian palm oil exports to the region decreased 22.5 percent or 448,11 tonnes to 1.54 million tonnes from 1.98 million tonnes in 2005, exports to the six Gulf Cooperation Council (GCC) countries saw a rise, except for Saudi Arabia where imports dropped sharply by 68.1 percent to 59,241 tonnes from 186,144 tonnes in 2005.
The United Arab Emirates (UAE) saw an increase of 14.7 percent to 302,738 tonnes from 264,004 tonnes in 2005, Bahrain bought 15.7 percent more with 1,091 tonnes compared with 943 tonnes previously, Kuwait saw a surge of 26.2 percent to 11,013 tonnes from 8,728 tonnes, Oman's imports rose sharply by 35.9 percent to 73,939 tonnes from 54,418 tonnes while Qatar purchased 103 tonnes last year compared to nil in 2005.
Iran's imports of the commodity also rose by 15 percent to 245,716 tonnes from 213,438 tonnes while Jordan imported 155,405 tonnes, a significant increase of 204.4 percent from 51,954 tonnes previously.
On the outlook of crude palm oil (CPO) production, Yusof said it is projected to rise marginally to 16.5 million tonnes this year, taking into consideration the impact of severe flooding in the oil palm growing areas in December 2006.
"While additions to mature oil palm acreage in Indonesia will shore up world output, the El Nino weather phenomenon is expected to have an adverse effect," he said.
Meanwhile, global oils and fats production is projected to grow 4.2 percent to 153.9 million tonnes for the marketing year October/September 2006/07 against 6.4 percent in the 2005/06 period.
"The slowdown is attributed to anticipated decline in rapeseed, groundnut and sunflower oil output. However, a slight increase is expected in soybean oil production," Yusof said.
Touching on the demand scenario, he said that in the EU, vegetable oil dynamics will still be determined by the biofuel sector this year with new capacity becoming operational in Germany, Spain and the United Kingdom.
He pointed out that higher than expected demand for vegetable oils for biofuel has raised dependence on imported soybean oil, sunflower oil, rapeseed oil and palm oil.
Meanwhile, world consumption of oils and fats from October/September 2006/07 is estimated to rise 6.1 percent to 154.9 million tonnes which will surpass supply and lead to reduction of stocks of various oils and oilseeds.
Yusof said that coupled with the projected decline in rapeseed oil, groundnut oil and sunflower oil production, palm oil will be perfectly positioned to meet the shortfall.
Overall, Malaysia continues to record impressive performance with export revenue from palm oil and its products rising 11.2 percent to RM31.8 billion last year from RM28.60 billion in 2005, bolstered by the rise in average price in the world market and higher demand for the commodity.
Malaysian palm oil also contributed significantly to world oils and fats production and the country also maintained dominance of the global palm oil trade, holding 49.3 percent of the market share.
Last year saw production of oils and fats at 150 million tonnes where palm oil was the largest contributor, accounting for 36.8 million tonnes or 24.7 percent of the total output and Malaysia contributed 15.9 million tonnes or 10.6 percent.
Its chief executive officer Tan Sri Dr Yusof Basiron said that demand for vegetable oils is typically driven by economic growth, especially in developing countries.
The most rapid rate of consumption and import growth is concentrated in several large markets in Asia and the Middle East, Yusof said in outlining the outlook for palm oil this year.
"This is driven by population growth and higher gross domestic product (GDP) growth, which increases purchasing power," he said in the MPOC Annual Report 2006, which was made available to Bernama here.
Yusof also said that consumption is further influenced by cost competitiveness, an area in which palm oil enjoys an advantage.
Last year, the major markets for Malaysian palm oil were China, the European Union (EU), the United States, India, Japan and Bangladesh. Together, they accounted for 65.3 percent or 9.41 million tonnes of the total export value with China topping the list with 3.64 million tonnes or 25.3 percent.
As for the Middle East, although Malaysian palm oil exports to the region decreased 22.5 percent or 448,11 tonnes to 1.54 million tonnes from 1.98 million tonnes in 2005, exports to the six Gulf Cooperation Council (GCC) countries saw a rise, except for Saudi Arabia where imports dropped sharply by 68.1 percent to 59,241 tonnes from 186,144 tonnes in 2005.
The United Arab Emirates (UAE) saw an increase of 14.7 percent to 302,738 tonnes from 264,004 tonnes in 2005, Bahrain bought 15.7 percent more with 1,091 tonnes compared with 943 tonnes previously, Kuwait saw a surge of 26.2 percent to 11,013 tonnes from 8,728 tonnes, Oman's imports rose sharply by 35.9 percent to 73,939 tonnes from 54,418 tonnes while Qatar purchased 103 tonnes last year compared to nil in 2005.
Iran's imports of the commodity also rose by 15 percent to 245,716 tonnes from 213,438 tonnes while Jordan imported 155,405 tonnes, a significant increase of 204.4 percent from 51,954 tonnes previously.
On the outlook of crude palm oil (CPO) production, Yusof said it is projected to rise marginally to 16.5 million tonnes this year, taking into consideration the impact of severe flooding in the oil palm growing areas in December 2006.
"While additions to mature oil palm acreage in Indonesia will shore up world output, the El Nino weather phenomenon is expected to have an adverse effect," he said.
Meanwhile, global oils and fats production is projected to grow 4.2 percent to 153.9 million tonnes for the marketing year October/September 2006/07 against 6.4 percent in the 2005/06 period.
"The slowdown is attributed to anticipated decline in rapeseed, groundnut and sunflower oil output. However, a slight increase is expected in soybean oil production," Yusof said.
Touching on the demand scenario, he said that in the EU, vegetable oil dynamics will still be determined by the biofuel sector this year with new capacity becoming operational in Germany, Spain and the United Kingdom.
He pointed out that higher than expected demand for vegetable oils for biofuel has raised dependence on imported soybean oil, sunflower oil, rapeseed oil and palm oil.
Meanwhile, world consumption of oils and fats from October/September 2006/07 is estimated to rise 6.1 percent to 154.9 million tonnes which will surpass supply and lead to reduction of stocks of various oils and oilseeds.
Yusof said that coupled with the projected decline in rapeseed oil, groundnut oil and sunflower oil production, palm oil will be perfectly positioned to meet the shortfall.
Overall, Malaysia continues to record impressive performance with export revenue from palm oil and its products rising 11.2 percent to RM31.8 billion last year from RM28.60 billion in 2005, bolstered by the rise in average price in the world market and higher demand for the commodity.
Malaysian palm oil also contributed significantly to world oils and fats production and the country also maintained dominance of the global palm oil trade, holding 49.3 percent of the market share.
Last year saw production of oils and fats at 150 million tonnes where palm oil was the largest contributor, accounting for 36.8 million tonnes or 24.7 percent of the total output and Malaysia contributed 15.9 million tonnes or 10.6 percent.
Soybean oil came in a close second with 35.3 million tonnes or 23.5 percent, the report said.