Demand for Malaysian palm oil set to rebound

Apr 9, 2017
Malaysian Palm Oil Council chief executive officer Kalyana Sundram, says he is upbeat of a surge in China’s palm oil imports. Photo from

Although China’s soyabean oil and rapeseed oil consumption has dragged down palm oil imports from Malaysia for the past few months, it will not last long as demand for the edible oil is set to rebound.

Malaysian Palm Oil Council’s (MPOC) chief executive officer Kalyana Sundram, said he is upbeat of a surge in China’s palm oil imports, especially from the coastal and Inner regions, backed by promotional activities and outreach activities in the country.

“Much of the palm oil are now not reaching the coastal and the Inner regions which still have a large population because of the logistics problems,” he told Bernama.

Kalyana said to facilitate this, MPOC plans to undertake more promotional activities in China.

“We are trying to put together promotional avenue in order for palm oil to reach out to the Inner regions,” he said.

In addition to this, Kalyana said, MPOC is working with the local Chinese wood manufacturers, entrepreneurs and non-food industry to do this.

“It is going to be a year-long task. Maybe, it will take several years but these are some of the promotional activities we need to do in order to increase Malaysian uptake palm oil in China.

“We would be happy with between 5.5 and six million tonnes of palm oil going to China. It would be a strong possibility if we do all the promotional work then that could be achieve,” he said.

Kalyana said that with greater bilateral trade with China and its projects in Malaysia, there could be spin-offs where palm oil is better recognised even by Chinese government agencies that buy oils and fats.

“They (Chinese government agencies) may be more amenable to using palm oil in their products. So it is a long-term attempts and we have to do continuous work,” he said.

He said China used soyabean crushing for animal feed and this is one of the reasons for the significant increase in soyabean oil consumption.

The rapeseed oil stockpile has also been progressively released, from a few million tonnes to less than 750,000 tonnes now, he said.

“As China taps into ample global supplies of the rival soyabean to feed its expanding livestock sector and state sales of rapeseed oil reserves, these have impacted the overall domestic consumption of all oils and fats and indirectly it has impacted overall palm oil imports in China,” he.

He said China’s palm oil imports plunged 24% to 4.48 million metric tonnes in 2016, the lowest since 2005, as benchmark futures rose 25% after El Nino squeezed supplies in Indonesia and Malaysia.

“A weaker yuan and state sales of rapeseed oil reserves also reduced the attractiveness of palm oil for local buyers,” he said. –Bernama