Zuraida: Biting into China's bakery fats market will boost palm oil downstream sector
21/09/2022 (The Edge Markets), Kuala Lumpur - Malaysia should further expand its market share in China’s bakery fats market, said Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin.
She said China has resorted to importing the main raw material from Indonesia and Malaysia, whose exports of shortening to China stood at 7,655 tonnes in 2021, as the republic's annual production is far from meeting its growing domestic consumption demand.
Hence, the minister has urged home-grown shortening and margarine manufacturers to forge tie-ups with reputable bakery enterprises in the world’s second-largest economy.
“Even though Malaysia’s ‘cake’ in China’s bakery industry is small at this moment, the world’s second-largest palm oil producer would be capable of expanding its market share in China’s bakery ingredient market with the right promotion and marketing strategies,” she said in a statement on Wednesday (Sept 21).
Her ministry said China’s margarine market is also growing rapidly with an annual growth rate of 20%.
China imports margarine from Indonesia, followed by 650 tonnes coming from Malaysia in 2021, an increase of 10% from 590 tonnes in 2020.
The market size of China’s bakery market has risen to 265.7 billion yuan (RM172.53 billion) from 187.7 billion yuan, with an average compound annual growth rate of about 9% from 2017 to 2021.
This is much higher than the growth rate of the global baking industry’s market size, added the statement.
Zuraida said it is expected that the market size of China’s baked food industry will reach 287.4 billion yuan in 2022.
Last year also saw investment in China’s bakery industry topping 26 other industries, with a total amount of 6.14 billion yuan, which is attributable to the post-Covid-19 recovery in economic activities.
Zuraida said this encouraging outlook for China’s baking industry, with baking fats being one of the key raw materials, augurs well for the downstream segment of Malaysia’s palm oil sector.
“To complement palm oil downstream players who are interested in solidifying their overseas business presence, the ministry has embarked on ‘The Global Movement to Champion the Goodness of Palm Oil’ campaign.
“This platform is intended to spark awareness of the high quality of Malaysian palm oil as well as to counter the various misinformation and false information levelled at our golden oil,” she said.